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But that doesnt mean youre not on the hook for paying taxes.
The good news is that there are several tax breaks available to retirees.
Hopefully taking advantage of them will help you stretch our dollars further.
Here are four common tax perks to help you lower the amount you may owe to the IRS.
Also here are six benefits for retirees filing early.
Higher Standard Deduction
Once you turn 65, the IRS offers anextra standard deduction.
This is an amount set by the IRS that will reduce how much of your income is taxed.
Though if youre single and not a surviving spouse, that amount goes up to $1,950.
You wont be eligible if you meet any of the exceptions.
Youll only qualify for this extra deduction if you turn 65 by the end of the tax year.
According to the IRS, this tactic is called aqualified charitable distribution(QCD).
While it doesnt lower your taxable income, the amount you donate doesnt count towards your taxes.
You will need to have made the charitable donation by December 31 of each year.
Contributing to a Traditional IRA could lower your taxable income now.
Especially if it exceeds the standard deduction.
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