6 Tax Benefits for People 50 and Older

Mature man working on his taxes at home using a computer.

Getting older isn't all bad. In fact, the IRS offers a handful of tax benefits geared especially toward taxpayers of a certain age. If you're 50 or older, you might qualify for one or more of the following age-defined tax breaks, designed to help you prepare for and manage your retirement finances a little easier.

1. Retirement Catch-Up Contributions

When you pass 50, you're allowed to boost your contributions to tax-advantaged retirement accounts, such as 401(k)s, traditional individual retirement accounts (IRAs) and Roth IRAs. Catch-up contributions may adjust for inflation from year to year. In 2024, individuals who are 50 or older at the end of the calendar year can make the following catch-up contributions:

  • 401(k), 403(b), governmental 457 and SARSEP: $7,500
  • Traditional and Roth IRAs: $1,000
  • SIMPLE IRA: $3,500

2. Penalty-Free Retirement Withdrawals

Withdrawing money from your retirement plan before age 59½ typically incurs a 10% early distribution penalty. Once you turn 59½, you can make withdrawals from your retirement accounts penalty-free.

Be forewarned: You may still have tax consequences for making a retirement withdrawal. Distributions from traditional retirement plans are taxed as regular income, including withdrawals from non-Roth 401(k), 403(b), SEP IRA and SIMPLE IRA plans. Distributions made from a Roth account after you turn 59½ are tax- and penalty-free.

3. Additional Standard Deduction

If you're age 65 or older at the end of the year (and, technically, also January 1 of the following year), you are entitled to a higher standard deduction on your federal tax return. The standard deduction applies when you don't itemize your deductions. It's an amount you can deduct from your taxable income to lower your tax liability, no receipts or record keeping required.

In 2024, the additional standard deduction amount for taxpayers 65 and older is $1,550. If you and your spouse both qualify and you file jointly, you may add $3,100 to your 2024 standard deduction of $29,200. If you are unmarried and file single or head of household, you may add $1,950, as long as you are not filing as a surviving spouse. IRS Form 1040-SR: U.S. Tax Return for Seniors includes a table to help you calculate your standard deduction.

4. Tax Credit for Elderly and Disabled

Taxpayers who are 65 or older, or are retired on permanent and total disability and received taxable disability income, may be eligible for a tax credit of $3,750 to $7,500. You must meet IRS income limits to qualify.

What are the income limits? If you filed as single or head of household in 2023, your adjusted gross income could not exceed $17,500 to qualify for the credit. If you had nontaxable Social Security and other nontaxable pension(s), annuities or disability income, the total from all these sources could not exceed $5,000. If you think you might qualify, IRS Schedule R Form 1040 can help you figure your eligibility for this credit.

5. Extra Health Savings Account Contributions

If you have a health savings account (HSA) to help cover your out-of-pocket health care expenses with a high-deductible health plan, you can contribute an additional $1,000 per year if you are age 55 or older. An HSA allows you to deduct eligible contributions from your taxable income in the year you contribute and make qualified withdrawals tax-free, a combination of tax benefits you don't often find in one place.

For 2024, HSA contribution limits are $4,150 for individual plans and $8,300 for family plans—plus $1,000 if you're 55 or older. Take advantage of this added benefit while you can: Once you enroll in Medicare, you can no longer contribute to an HSA.

6. Deductible Charity Distributions

If you're 70½ or older, you may be able to exclude up to $100,000 in charity donations you make directly from your traditional IRA. Qualified charitable deductions let you exclude otherwise taxable distributions when you send the money directly to a qualified charity. Best of all, a qualified charitable distribution can count as all or part of your required minimum distribution (RMD).

Taxpayers who turn 73 after December 31, 2023, must begin taking—and paying taxes on—RMDs starting at age 73. Making a distribution to your favorite qualified charity (or charities) can help take the bite out of your tax bill while funding a good cause.

The Bottom Line

Of course, these aren't the only tax benefits you can enjoy when you're 50 or older. Many of the tax credits and deductions you've been eligible for up until now are still available to you, regardless of age. At the same time, many people in their 50s or 60s and beyond find their finances have changed. Maybe you're making a final push toward retirement, or maybe you've settled into a new lifestyle financed by Social Security and retirement savings.

In any case, tax benefits for people over 50 (or 55, 65, 70½ and so on) are designed to help ease the adjustment and lighten the tax load as you move into later life. If any of these tax breaks work for you, enjoy. You've spent a lifetime paying taxes: You've earned a break.