ALBANY, NY – For seniors in New York, managing retirement finances involves making the most of available tax breaks. One powerful option is the extra standard deduction, a federal benefit that can reduce taxable income and lower your federal tax bill.
Extra Standard Deduction for Seniors
The extra standard deduction is an additional amount that seniors (65 and older) and legally blind individuals can claim on top of the regular standard deduction. This benefit acknowledges the higher living expenses faced by seniors, such as healthcare costs.
For the 2025 tax year, the extra deduction amounts are as follows:
- Single or Head of Household: Additional $1,950 for those 65 or older.
- Married Filing Jointly: Additional $1,550 for each spouse 65 or older.
- Married Filing Separately: Additional $1,550 if eligible.
If both you and your spouse are 65 or older and legally blind, you can claim both increases. These additional amounts are added to the regular standard deduction, which is $14,600 for single filers and $29,200 for married couples filing jointly in 2025.
How This Deduction Benefits New York Seniors
While New York offers its own tax breaks for seniors, federal taxes still apply. Many seniors in the state rely on a mix of Social Security, pensions, retirement savings withdrawals, and part-time work. Reducing taxable income on the federal level can:
- Lower your federal tax liability.
- Keep you in a lower tax bracket.
- Reduce the amount of Social Security income subject to taxation.
For example, a single senior in New York earning $30,000 in taxable income could lower it to $28,050 by claiming the extra deduction, saving hundreds in taxes, according to Kiplinger.
Eligibility Criteria for the Extra Deduction
You qualify for the extra standard deduction if:
- You are 65 or older by December 31 of the tax year.
- You are legally blind (requires certification).
- If both apply, you can claim both increases.
For married couples, each spouse’s eligibility is counted separately, meaning if both are 65+, the deduction doubles.
Steps to Claim the Extra Deduction
Claiming the extra deduction is simple:
- File using Form 1040 or 1040-SR – The 1040-SR form is designed specifically for seniors, featuring larger print and a simpler layout.
- Check the appropriate boxes – Indicate your age or blindness status.
- The IRS will automatically adjust your standard deduction based on the information provided.
Even if you believe your income is too low, filing a tax return ensures you claim the deduction and any potential refunds.
How New York State Taxes Interact with the Federal Deduction
New York has its own tax rules, but seniors can benefit from both:
- Pension and Retirement Income Exclusion: Seniors 59½ or older can exclude up to $20,000 of retirement income from state taxes.
- Social Security Exemption: Social Security benefits are not taxed in New York.
- STAR Programs: STAR and Enhanced STAR programs provide property tax relief for homeowners, with Enhanced STAR offering greater benefits for seniors meeting income requirements.
When combined with the federal extra standard deduction, these state benefits significantly reduce your overall tax burden.
Tips for Seniors to Maximize Tax Savings
- Review Your Filing Status: Married seniors should calculate taxes both jointly and separately to determine the better option.
- Utilize Retirement Contributions: Contributing to a Traditional IRA can lower taxable income, even in retirement.
- Track Medical Expenses: If you itemize, you can deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
- Plan Retirement Withdrawals: Spreading withdrawals from retirement accounts over several years can help avoid higher tax brackets.
Common Errors Seniors Make When Claiming the Deduction
Many seniors miss out on this benefit due to common mistakes:
- Believing they don’t qualify if they’re still working.
- Failing to check the age or blindness boxes on their tax return.
- Assuming they have to claim it separately (it’s part of the standard deduction).
Even if your income is low, it’s still worth filing a return to ensure you claim every eligible deduction and potentially receive a refund.
Conclusion
The extra standard deduction is a simple yet effective way for seniors to reduce their federal tax bills. For New York residents over 65, the deduction is even more valuable when combined with state benefits like pension exclusions, property tax relief programs, and Social Security exemptions.
Understanding and claiming this benefit helps seniors keep more of their retirement income and reduces the financial stress of taxes in their later years.
Seniors, how do you manage your taxes in retirement? Share your strategies in the comments.
