New senior bonus deduction offers tax relief for older Americans

(InvestigateTV) — A new “senior bonus deduction” is available this tax season for filers age 65 and older, on top of the existing standard deduction.

The deduction can be worth up to $6,000 for individuals or up to $12,000 for married couples, according to Bill Sweeney, senior vice president for Government Affairs at AARP. It is designed to help lower and middle-income retirees keep more of their income.

The deduction phases out above certain income levels — up to $75,000 for an individual and $150,000 for a couple, Sweeney said.

“As long as you’re 65 or older, you qualify,” Sweeney said. “It’s whether you itemize or don’t itemize. Whether you are filling out your own taxes and someone’s helping you. If you go to a place like a tax preparer — they will do this for you. If you are doing your taxes on your own, there is a new form — it’s Schedule 1A.”

Sweeney said the benefit is significant for seniors on fixed incomes.

“$670 a person is a ton of money for people who are stretched thin — trying to put groceries on the table, trying to make ends meet,” Sweeney said. “It’s a big deal for people, especially if they can get it in their tax refund before April 15th.”

AARP is urging seniors to file before the April 15 deadline to avoid missing the benefit.

“Make sure you don’t wait,” Sweeney said. “If you do need help figuring out your taxes or whether you qualify, AARP operates a free tax prep service called ‘Tax Aid.’ We have more than 3,600 locations around the country that provide free assistance. We’ve got volunteers already trained and they’re helping people right now to fill out their taxes.”

A recent AARP survey found that one in three older adults feel financially insecure, and 74% are worried they won’t be able to live independently in retirement.