Kiplinger's Personal: How tax rules change as you age
Your life changes in many ways when you get older. But there's something else that changes as you age that you might not have considered before: your taxes.
There are different tax breaks that you can claim when you're older, and the types of income you're likely to receive are taxed differently than wages.
Here's a quick rundown.
Your 50s: When you hit 50, you can squirrel away even more money as "catch-up" contributions to tax-advantaged retirement accounts. For 2023, you can put an extra
Catch-up contributions are also allowed for health savings accounts. Once you turn 55, you can put an additional
Your 60s: Most people retire in their 60s, and that's when tax changes really kick in.
Part of the change is triggered by the different types of income you receive in retirement. For instance, instead of wages, which are 100% taxable, at least 15% of your
There are also tax breaks that only become available after your 65th birthday. For example, there's an additional standard deduction for people 65 and older. For 2023, it's
There's also a tax credit available for lower-income taxpayers who are 65 or older. It's worth up to
Also look for other generally available write-offs that might not come into play until you reach your 60s. For example, if medical bills start growing as you age, you may be able to deduct some of those expenses. You must itemize to claim the medical expense deduction, and then you can only deduct qualifying costs that exceed 7.5% of your adjusted gross income.
And don't forget about state tax breaks. Many states provide full or partial tax exemptions for
Your 70s: The biggest tax change for people in their 70s is the start of required minimum distributions from retirement accounts. Your money has been growing in your traditional IRAs and 401(k) accounts for years, and now the
For the year you turn 72, the deadline for taking your first RMD is
If you're at least 701/2 years old, donating to charity with a qualified charitable distribution from an IRA can also cut your tax bill because the withdrawn funds aren't taxed. Plus, money donated through a qualified distribution counts toward your RMD.


How tax rules change as you age
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