Reaching half a century should come with some rewards, and the IRS is ready to hand them out. Once you reach age 50, you begin to qualify for some tax breaks that younger taxpayers don’t get, including the ability to contribute more to retirement accounts.
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Some of the breaks date back 20 years, when they were included in the Economic Growth and Tax Relief Reconciliation Act that went into effect in 2002, AARP reported. The provisions were put in place because some lawmakers were concerned that baby boomers were not saving enough for their retirement. Other tax-saving provisions were added in the Tax Cut and Jobs Act of 2017.
Here’s a quick look at some of the tax relief you’ll get once you turn 50:
Higher contribution limits for retirement accounts: The contribution limit for most employees with 401(k), 403(b), most 457 retirement savings plans and the federal savings plan has been raised to $20,500 in 2022 versus $19,500 in 2021. But employees 50 and older can add an additional $6,500, for a total of $27,000.
Higher contribution limits for health savings accounts: Most taxpayers can contribute up to $3,650 to HSAs if they have coverage for themselves, or up to $7,300 for family coverage. The catch-up is an additional $1,000 if you turn 55 during the year. Remember that your contribution limit is reduced by any amount contributed by your employer that has been excluded from your income.
Larger flat-rate deduction at age 65: Taxpayers benefit from a standard deduction which reduces their taxable income and reduces their tax bill. For 2022, most married couples will receive a standard deduction of $25,100. For single taxpayers and married individuals filing separately, the standard deduction is $12,550. But if you’re 65 or older and file as a single taxpayer, you get an additional standard deduction of $1,700 for the 2021 tax year and an additional $1,750 for the year 2022 tax. If you are married and filing jointly, the additional standard deduction is $1,350 if only one person is 65 or older. If both are 65 or older, the additional standard deduction is $2,700. For taxpayers who are both 65 and over and blind, the additional deduction is doubled.
Another potential benefit is that you can use the new simplified Seniors’ Form 1040-SR if you’re 65 or older and don’t have a complicated tax return. The form has a larger font if you are still filing paper returns.
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This article originally appeared on GOBankingRates.com: Taxes 2022: Tax relief for filers over 50