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3 (Lucky) Tax Breaks for Retirees

During your working years, you experienced quite a few milestones: advancing in your career, your first home, and other notable moments. Some of those milestone experiences may have come with some tax breaks as well, but now you’ve reached the ultimate break — retirement. Is there still the possibility of experiencing these breaks now?

As tax season rolls on, it’s important to be aware of your options. Things may not feel so lucky right now, but in honor of St. Patrick’s Day, here are three “lucky” breaks you could see in your retirement taxes.

Filing Requirements for Most Taxpayers

If you don’t itemize your tax deductions and are over the age of 65, you can earn a gross income of up to $13,850 before having to file for a tax return compared to $12,200 for those 64 and under filing single. If you’re married filing jointly, this jumps to $24,400 (both spouses under age 65), $25,700 (one spouse over age 65), or $27,000 (both spouses over age 65).

Higher HSA Contribution Limit

While a health savings account is great for obvious medical reasons, this product can also be used as an effective financial vehicle. These funds can be held tax-free until retirement. This could be beneficial for several reasons, like we mentioned in a recent article on tax-deferred retirement accounts. For those over the age of 55, this account can receive an extra $1,000 each year; if your spouse is over 55, he or she is able to do the same, provided each of you has an individual HSA and follows its allowable rules and provisions.

Qualified Charitable Distributions

Usually, those in retirement are required to take required minimum distributions from their qualified accounts, which are then taxed. But what if you didn’t need those funds? Uncle Sam is taking money you don’t even need! Thankfully, those taking their required minimum distributions are allowed to donate up to $100,000 directly to qualified charities.

Of course, these are just a few tax breaks that retirees have access to. If you’d like to learn more information on  tax strategies in retirement, register for an American Retirement Institute course with our network of experienced financial educators today!

American Retirement Institute is not affiliated with any collegiate university or college. The financial educators are licensed insurance professionals. They may also be Registered Representatives and/or Investment Advisor Representatives. The material presented is not intended as legal or tax advice, or as any other type of specific advice, and should not be construed or interpreted as such. Please consult with your attorney, accountant, and/or tax advisor for advice concerning your particular circumstances.