8 Tax Breaks That Get Better With Age

Whether you've already retired or are remaining part of the workforce for a few years, taxes are part of your financial future. And while you're probably not looking forward to tax season, that could change as you get older.

Americans age 50 and up receive crucial age-based tax breaks that can make life a little easier after retirement.

Keep reading to learn about eight useful tax benefits of aging that could help boost your bank account.  

Contributions made to traditional IRAs are tax deductible, so they lower your overall taxable income for the year. The Internal Revenue Service (IRS) regulates how much you can contribute to a traditional IRA over a single tax year. 

For instance, for the 2025 tax year, individuals may contribute a maximum of $7,000 across all of their IRAs, including both traditional and Roth IRAs.

However, once you turn 50, you're allowed to make additional tax-deductible contributions to traditional IRAs, helping you build wealth faster. 

For the 2025 tax year, those 50+ could contribute an extra $1,000 to their accounts. If you go this route, you could lower your taxable income by saving more for retirement.

While individuals are allowed to make withdrawals from IRAs before they retire, those withdrawals are usually subject to a 10% tax penalty (with a handful of exceptions for certain pressing financial emergencies).

However, once you turn 59 1/2, you may start withdrawing money from your IRAs without incurring the penalty fee. You'll still need to report any withdrawals as income, but you'll only have to worry about typical income taxes, not an extra tax penalty.

Health savings accounts HSAs are tax-advantaged accounts that usually go hand-in-hand with high-deductible insurance plans. 

For the 2025 tax year, individuals are allowed to contribute up to $1,000 to an HSA. Families on high-deductible insurance plans may contribute up to $1,000. The amount you don't use during the year rolls over.

As with traditional IRAs, older individuals are allowed to contribute an extra $1,000 per person to their HSAs once they reach age 55.

Typically, funds from HSAs must be used to cover specific medical expenses. If you withdraw the funds for another purpose, you'll be hit with a 20% tax penalty — unless you're at least 65. 

At that age, you can withdraw HSA funds to use for any purpose, not just medical expenses. You'll pay a typical income tax on any withdrawn funds, but no additional tax penalty will apply.

Many U.S. taxpayers qualify for the IRS's "standard deduction," which is a set dollar amount deducted from your gross income to lower your overall taxable income for the year. 

For the 2025 tax year, that deduction will be $15,000 if you file as an individual or are married but filing separately. The standard deduction rises to $30,000 for those who are married and filing jointly.

However, if you celebrate your 65th birthday before the end of the tax year (or are already over 65), you qualify for a higher standard deduction on that year's taxes. 

For the 2025 tax year, you'll get an extra $2,000 added to your standard deduction. Married couples filing jointly get an extra $1,600 per person.

The standard deduction also increases if either you or your qualifying spouse is blind.

Once you turn 73, your IRAs are subject to the required minimum distributions (RMDs). This means you'll need to start withdrawing a certain amount of funds from any traditional IRAs and reporting those funds as taxable income.

However, if you're at least 70 1/2, you can use money from your IRA to make a qualified charitable distribution (QCD). The money you donate won't be taxed, but it will count toward your required minimum distribution, which can keep your tax burden manageable.

Some states offer property tax benefits for elderly property owners. Benefits differ from state to state, so you'll need to check with your state government to find out if property tax relief is available and, if it is, how much tax assistance you qualify for.

No matter how many years old (or young) you are, taxes are complicated. Luckily, once you turn 60, the federal government offers additional tax-filing assistance through the Tax Counseling for the Elderly (TCE) program. 

Plus, in most cases, you should be able to file your taxes for free once you reach senior status. Check the IRS's TCE locator tool to find your closest TCE location.

Aging can come with many financial challenges, but taxes don't have to be among them. 

As you approach retirement, take advantage of these age-related tax breaks. Every penny saved counts toward a stress-free retirement.