Taxes

By the Retiree Report Editorial Team · Updated 2026-05-22 · 7 min read

This article is general information, not financial, tax, or legal advice. Consult a licensed professional before acting on it.

Seven tax deductions and credits seniors often miss on a 2026 return

For the 2026 tax year, the federal code rewards older filers more generously than it did even two years ago — but only if you remember to take the breaks. A new $6,000 bonus deduction for filers 65 and older, layered on top of the regular standard deduction and the long-standing Credit for the Elderly or the Disabled, can mean hundreds or even thousands of dollars in refunds left unclaimed. AARP estimates the average gain from the new bonus alone runs about $670. Here are seven items worth checking before you sign your 1040.

The new $6,000 senior bonus deduction

The headline change for 2026 is what the IRS calls the “enhanced deduction for seniors,” a piece of the One Big Beautiful Bill Act signed in July 2025. If you were 65 or older at any point in the tax year, you can subtract an extra $6,000 from your taxable income — $12,000 if you and your spouse are both old enough and filing jointly. It applies whether you take the standard deduction or itemize, and it sits on top of the regular age-65 standard deduction add-on you’ve claimed in past years.

There’s an income test. The bonus phases out once modified adjusted gross income passes $75,000 for single filers or $150,000 for joint filers, and it disappears entirely around $175,000 single and $250,000 joint. According to the IRS, the provision runs through tax year 2028 unless Congress extends it. If you’re hovering near the phase-out line, a Roth conversion or a careful look at your IRMAA bracket can shift more dollars under the cap than you’d expect.

What is the Credit for the Elderly or the Disabled?

This one has been on the books since the 1970s, and most tax software still buries it. Worth between $3,750 and $7,500 depending on filing status, the Credit for the Elderly or the Disabled requires Schedule R attached to your Form 1040. You qualify if you’re 65 or older, or under 65 and retired on permanent and total disability with taxable disability income.

The catch is the income ceiling. For singles 65 or older, adjusted gross income generally has to stay under $17,500, and nontaxable Social Security and pension income counts against a separate cap. That rules out most middle-income retirees. But for a widow or widower living mostly on a small pension plus Social Security, the credit can wipe out a federal tax bill entirely. Plenty of filers in that band never check the box because their software doesn’t ask.

Medical bills, Medicare premiums, and the 7.5% floor

If you itemize, you can deduct unreimbursed medical and dental expenses that exceed 7.5 percent of your adjusted gross income. The IRS’s Topic 502 guidance spells out what counts, and the list is broader than most people realize. Medicare Part B and Part D premiums (paid with after-tax dollars, not pre-tax payroll deductions), Medigap premiums, Medicare Advantage premiums, dental crowns, hearing aids and batteries, prescription glasses, in-home nursing aide hours, and even mileage to and from the doctor’s office at the standard medical rate all qualify.

Most retirees skip the itemized route because the new combined standard deduction is so large. Fair enough. But a year that includes joint-replacement surgery, an extended hospital stay, or a few months of memory-care board can push a household over the floor in a hurry.

Run the numbers — don’t assume.

Long-term care insurance premiums you can write off

Premiums on a tax-qualified long-term care policy count as medical expenses, and the deductible portion rises with your age. For 2026, the IRS-permitted amounts are $1,860 for ages 51–60, $4,960 for ages 61–70, and $6,200 for anyone 71 or older. Those numbers are per insured person, so a married couple in their seventies can potentially write off more than $12,000 between them.

The same 7.5 percent AGI floor still applies, and the policy has to meet federal tax-qualified standards (most modern stand-alone long-term care policies do). If you bought a hybrid life-insurance-plus-long-term-care product, ask your carrier for the qualified-LTC portion of the premium in writing before you file.

The IRA gift that’s not on your 1099

A qualified charitable distribution, or QCD, lets you send money straight from a traditional IRA to a 501(c)(3) charity once you’re 70½. In 2026 the cap is $111,000 per person. The money never lands in your bank account, so it never shows up in your adjusted gross income, and that matters in ways the deduction equivalent doesn’t.

Why does the AGI difference matter so much? Because adjusted gross income drives your IRMAA Medicare surcharge, the share of Social Security that gets taxed, and a long list of phaseouts. A $20,000 charitable check written from a checking account is deductible only if you itemize. A $20,000 QCD reduces AGI for everyone, itemizer or not — and for filers who are 73 or older it can satisfy part or all of that year’s required minimum distribution. For more on the timing rules, see our walk-through of the 2026 RMD rules under SECURE 2.0.

One catch: the broker has to send the funds directly to the charity. Write the check yourself and you’ve blown the QCD.

The Saver’s Credit, if you’re still earning

Plenty of Americans keep working past 65, often part-time. If that’s you, and your household income is modest, you may qualify for the Retirement Savings Contributions Credit — better known as the Saver’s Credit. It’s worth up to 50 percent of the first $2,000 you put into an IRA or workplace plan ($4,000 for joint filers).

The 2026 income caps published by the IRS are $40,250 for singles, $60,375 for heads of household, and $80,500 for married couples filing jointly. The 50 percent credit rate only kicks in at the lowest brackets; at higher incomes the credit drops to 20 percent or 10 percent. It’s nonrefundable, so it can zero out a tax bill but won’t generate a refund on its own. Still, a $1,000 reduction on a $2,000 contribution is hard to ignore.

HSA catch-up contributions at 55 and up

If you’ve delayed enrolling in Medicare because you’re still on a workplace high-deductible health plan, you can keep funding a health savings account — and add a $1,000 catch-up contribution each year once you hit 55. HSA contributions are deductible whether you itemize or not, and qualified medical withdrawals are tax-free at any age.

Enroll in Medicare and the HSA contribution door closes. That trip-wire surprises a lot of 65-and-still-working filers who delay Medicare Part A to keep contributing. Read the rules carefully before signing up for either side.

What to do before April 15

Free help exists, and most filers over 60 qualify for it. The IRS Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs train preparers to handle exactly the credits in this article. AARP Foundation Tax-Aide runs roughly 3,500 free sites nationwide each February through April, with no AARP membership and no income requirement. If you use commercial software, walk through the senior-specific interview questions twice — once at the start and once before you e-file — because the Credit for the Elderly and the new $6,000 bonus both depend on age, filing status, and income flags the program may not infer on its own.

One last reminder: keep this article alongside your return, not as a substitute for personal advice. A CPA or enrolled agent who works regularly with older clients can spot state-level breaks (property-tax credits, pension-income exclusions, homestead programs) that federal-only software ignores.

What to remember

Three things matter most. The new $6,000 senior bonus is automatic on paper but easy to miss in practice, so confirm your software or preparer applied it. The 7.5 percent medical floor sounds tall, but a heavy-spending year clears it more easily than you’d think, especially once long-term care premiums get added in. And if you’re charitably inclined and over 70½, a QCD almost always beats writing a check from your checking account.