Over 60? Don't Miss These 7 IRS Breaks That Can Cut Your Tax Bill

One perk of getting older is unexpected tax breaks. Tax deductions and credits aimed specifically at seniors can reduce how much you owe to the government, helping you stretch savings in retirement.

If you are over 60, you can avoid wasting money in retirement by taking advantage of these tax breaks.

New OBBB senior deduction

As the name implies, this is technically a tax deduction, not a credit. Seniors who are 65 or older can enjoy a new deduction of an extra $6,000 when they file a federal return. You can take this deduction whether you use the standard deduction or itemize on your tax return.

The new perk became law as part of the One Big Beautiful Bill Act, which Congress passed in 2025. This tax break will be in place for all tax years between 2025 and 2028, and is available to each senior who is 65 or older.

Couples this age will receive an extra annual deduction of $12,000 over the next few years. However, the deduction begins to phase out if you are single and have a modified adjusted gross income over $75,000, or are married filing jointly with an income above $150,000.

Extra standard deduction

This is another tax deduction rather than a tax credit. In addition to the expanded deduction that recently became law, those who are 65 or older can continue to take the existing extra standard deduction.

For the 2026 tax year, single taxpayers who are at least 65 can take an extra standard deduction of $2,050. For married couples filing jointly, the extra standard deduction is $1,650 per qualifying spouse.

The expanded standard deduction for seniors can be combined with the new senior deduction that is available for the 2025 to 2028 tax years.

Credit for the elderly or disabled

You may qualify for the Credit for the Elderly or the Disabled, worth up to $1,125, if your income and nontaxable Social Security, pension, annuity, or disability income fall below certain limits. 

To qualify, you must be at least 65, or, if you're under 65, retired on permanent and total disability, receiving taxable disability income, and not have reached your employer's mandatory retirement age before the tax year.

You can learn more in the IRS Instructions for Schedule R (Form 1040), Credit for the Elderly or the Disabled.

Medical expense deductions

Although not technically a credit, the IRS allows you to deduct from income qualifying medical expenses that exceed 7.5% of your adjusted gross income. You must itemize your deductions on your tax return to qualify for this tax break.

Technically, this deduction is available to all taxpayers, regardless of age. However, seniors may be in an especially good position to take advantage of it, since their incomes may be lower and their health expenses higher compared to younger folks.

Qualified charitable distribution

If you are at least 70 1/2, you can lower your tax bill by making a qualified charitable distribution. This lets you transfer up to $111,000 directly to the charity of your choice without including it in your taxable income.

This strategy is known as an income exclusion or a tax strategy rather than a credit. It is most effective for those who have reached the age of 73 and whose retirement accounts are now subject to required minimum distributions. Because the money is not included in your income, these distributions can help lower your tax bill.

IRA and 401(k) contributions after retirement

If you are over 60 but still working, you can lower your tax bill by making contributions to a traditional IRA or 401(k) plan.

For 2026, 401(k) contribution limits are $24,500. In addition, those who are age 50 and older can make a catch-up contribution of $8,000. Those who are between the ages of 60 and 63 can make an even larger catch-up contribution of $11,250.

IRA contribution limits are $7,500, plus a catch-up contribution of $1,100 for those who are 50 and older. Although not technically tax credits, these are valuable tax deductions and deferrals.

Health savings account contributions

If you have not yet reached the age of 65 and enrolled in Medicare, you can still contribute to a health savings account (HSA). For 2026, HSA contribution limits are $4,400 for self-only coverage and $8,750 for family coverage. In addition, those who are at least 55 can make a catch-up contribution of $1,000.

HSAs do not provide tax credits, but they are triple tax-advantaged. You pay no taxes on contributions, the money grows tax-deferred, and withdrawals are tax-free as long as they are used to pay qualified medical expenses.

Bottom line

The IRS offers several federal tax breaks for people 60 or older. Your state also may offer more. For example, Iowa taxpayers who are at least 55 can exclude all retirement income from Iowa state taxes. In Pennsylvania, seniors age 65 or older may qualify for up to $1,000 in property tax rebates.

Talk to your tax professional to find out if your state offers extra tax breaks for those over 60. Use the money you save from these tax breaks to build your savings even more, crush your debt, or take a nice vacation.

You May Also Like

23 Ways To Get Money Without Getting A Second Job

By FinanceBuzz Editors

How To Save Money on Car Insurance: 12 Ways to Lower Rates

By Elyssa Kirkham

10 Things Seniors Born Between 1941-1969 Could Take Advantage Of

By FinanceBuzz Editors

19 Dumbest Things Smart People Waste Money On

By Team FBZ

7 Moves If You Want to Stop Living Paycheck to Paycheck

By FinanceBuzz Editors

7 Clever Ways to Crush Your Debt

By FinanceBuzz Editors

Up To 5% Cash Back

Discover it^® Cash Back

Benefits Card Details

• Intro APR on purchases and balance transfers
• $0 annual fee
• Apply Now

• INTRO OFFER: Receive a $200 statement credit when you spend $500 on purchases in your first 3 months of account opening
• UNLIMITED CASHBACK MATCH: Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300. Click Apply Now to view important rates and disclosures
• Earn 5% cash back on everyday purchases at different places you shop each quarter, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases
• Redeem cash back for any amount. Every $1 you earn in cash back is $1 you can redeem
• Rewards don't expire for the life of the account
• No annual fee and no foreign transaction fee
• Lock your card in the Mobile app if it’s misplaced, lost, or stolen
• You're covered by $0 Fraud Liability for unauthorized charges

4.7

FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.

Apply Now

on Issuer's secure website

Rates and fees

Read Card Review

Intro Offer

UNLIMITED CASHBACK MATCH: Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300. Click Apply Now to view important rates and disclosures. Plus, receive a $200 statement credit when you spend $500 on purchases in your first 3 months of account opening

Annual Fee

$0

+ -

Why we like it

• The Discover it^® Cash Back is ideal for anyone who loves flexible rewards options.

• Cardholders can redeem their cash back for any amount.

• Earn 5% cash back on rotating bonus categories up to the quarterly maximum when you activate, along with 1% cash back on all purchases.

• Apply Now

---

Subscribe Today

Learn how to make an extra $200

Get vetted side hustles and proven ways to earn extra cash sent to your inbox.

or

Subscribe Now →

By submitting this form you agree to receive emails from FinanceBuzz and to the privacy policy and terms