Keeping more of your money, because you did not work all those years just to tip the IRS.
January is when the holiday decorations come down, the calendar flips, and many people start thinking about filing their 2025 tax return, which is filed in 2026. A little planning early in the year can help avoid surprises later, and fewer moments that start with, "Wait, I owe how much?"
The 2025 Standard Deduction, With the Exact Numbers
For tax year 2025, the standard deduction amounts are:
Married filing jointly or surviving spouse: $30,000
Head of household: $22,500
Single or married filing separately: $15,000
If you are age 65 or older, or blind, you may qualify for an additional standard deduction on top of the base amount.
For tax year 2025: The additional amount is $1,600 per qualifying person on a joint return. The additional amount is $2,000 if you are unmarried and not a surviving spouse.
EXAMPLES:
Single (age 65+): $15,000 + $2,000 = $17,000
Married filing jointly (both spouses 65+): $30,000 + $1,600 +$1,600 = $33,200
Common Deductions and Credits Seniors Should Know
Medical and dental expenses may be deductible if you itemize and your unreimbursed expenses exceed 7.5 percent of your adjusted gross income. This can include dental work, hearing aids, copays, and other qualified medical costs. Saving receipts is key.
Charitable giving can also be tax smart. If you are age 70½ or older, Qualified Charitable Distributions from an IRA can satisfy required minimum distributions while potentially keeping that income out of taxable income. For 2025, the annual QCD limit is $108,000 per person.
Some seniors may qualify for the Credit for the Elderly or the Disabled, depending on income. This credit directly reduces taxes owed and is worth reviewing if income is more limited.
Required Minimum Distributions, or RMDs, are mandatory withdrawals from certain retirement accounts such as traditional IRAs and many employer retirement plans. RMDs generally begin at age 73. Your first RMD is usually due by April 1 of the year following the year you reach that age, with future RMDs due by December 31 each year. Delaying the first RMD can result in taking two taxable distributions in the same year.
If an RMD is missed or underpaid, the IRS can assess a penalty of 25% of the amount not withdrawn, which may be reduced to 10% if corrected in a timely manner.
Getting organized early in the year can reduce stress and help you keep more of your retirement income. A little planning goes a long way.
By Marc Frye
Marc Frye provides financial analysis and market commentary for the ARA newsletter, translating complex economic trends into actionable insights for retirees.
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Easy Eddie's Take
Marc hits on something important here that a lot of people ask me about: "How do I actually use these tax breaks in retirement?" Let's take a look at this together. That additional standard deduction for folks 65 and older is automatic money in your pocket, but many people don't realize it applies to both spouses on a joint return. And here's something that surprises people: if you're doing Qualified Charitable Distributions from your traditional IRA to satisfy your Required Minimum Distribution, that money never shows up as taxable income on your Form 1040 in the first place.
Most folks are also surprised when they learn that medical expenses can really add up to meaningful deductions. Think of it this way: if your Adjusted Gross Income is $50,000 and your medical expenses hit $4,000, you can deduct $250 above that 7.5% threshold. Between Medicare premiums, dental work, and hearing aids, those numbers climb faster than people expect in 2026.
Here's the good news: getting your tax ducks in a row early in the year really does make April a lot less stressful. Once you see how these pieces fit together, it's actually pretty straightforward.