When tax times rolls around, most taxpayers look for every legal way possible to lower their taxable incomes and increase their income tax refunds. Part of the tax equation each year is determining whether to take the standard deduction or to claim the sum of your itemized deductions instead. Itemized deductions include mortgage interest, charitable contributions, certain medical expenses, state and local income or sales taxes, and state, local and foreign real estate taxes. If you claim your itemized deductions, you can't claim the standard deduction. However, if you're 65 or older, your standard deduction will be larger, which could change how you file your income taxes.
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Qualification for the Higher Standard Deduction
To qualify for a higher standard deduction for being at least 65 years old, the IRS determines your age as of the end of the tax year and considers you to be 65 years old the day before your 65th birthday. For example, to claim the higher standard deduction on your 2017 income tax return, you must be born before January 2, 1953.
Amount of the Increased Deduction
For 2017, if you are 65 or older, your standard deduction increases by $1,550 if you file as single or head of household, and $1,250 if you are married filing jointly or married filing separately. If you're married filing jointly and your spouse is also 65 or older, your standard deduction increases by another $1,250. Furthermore, you get a similar boost to your standard deduction if you are blind. So, if you file as single or head of household and you are both 65 or older and blind, your standard deduction increases by $3,100. If you're married filing separately, it goes up by $2,500. If you're married filing jointly and both you and your spouse are at least 65 and blind, your standard deduction increases by $5,000.
Itemized Deductions Less Valuable After 2017
Beginning with the 2018 tax year, the standard deduction increases substantially for all filing statuses, regardless of your age. In 2018, the base standard deduction increases to $12,000 for singles, $18,000 for heads of household, and $24,000 for married couples filing jointly. However, there's no change to the additional deduction for being 65 or older. So, even though there is no additional increase to the bonus for being at least 65 years old, you may find yourself taking the standard deduction because the initial amount is so much higher.