Are you over 50? If you are, you might qualify for a number of tax breaks when you file your 2015 income tax return. Typically, being 65 or older is when you really begin to reap the benefits of age as it applies to tax breaks, but it is not uncommon for those 50 and older to also receive a few tax breaks that might make life just a bit easier and more affordable. Let’s take a look for you to see if you qualify for any of these tax breaks so you can hopefully lower your income tax liability as the deadline for filing your income tax return draws near.
Higher Standard Deduction
If you file your own taxes, it’s helpful to know that the federal standard deduction in 2015 for a person over 65 is $7,850. This is more than $1,500 more than the standard deduction for anyone younger.
Additional IRA Deduction
If you are 50 or older, you can contribute a grand total of $1,000 to your IRA each year for a bigger tax break. Since many of these deductions are actually for those over 65, you might be pleased to see this one if you are over 50 but still younger than 65.
Early Withdrawal Penalties
Once you are 59.5-years-young, you may begin withdrawing money from your retirement accounts without paying any penalties. This is a nice break if you need to access your funds now, but don’t want to pay the hefty 10% penalty.
Higher HSA Contribution
Are you over 55? If you are, you can contribute more to your health savings account than anyone younger than you. The limit for you is now $4,350, which is a staggering $1,000 more than anyone younger than you can contribute.
If you reached the age 65 during 2015, you are eligible to deduct more of your health expenses than anyone younger. You can claim them if they exceed 7.5% of your income rather than the standard 10% of your income, which is a nice limit.
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