Retirement is the time of your life where you need to enjoy the fruits of your hard work. Spending time with your family, trying a new hobby or maybe even moving to a new state.
It is important, now that you are retired, to learn how to cut some of the taxes, mostly because you have a fixed income and you want to enjoy the savings you worked so hard for your whole life.
However, because we know how high taxes can go we thought we should present you a list with tips of how you can benefit of some breaks.
1. If you sell your house the IRS let’s you omit from your income up to $250,00 (and up to $500,00 if you are married) of financial gains from the sale
2. If you decide to become self-employed you can deduct your medical costs
3. Donations to charity will get you a big deduction
4. If you move in your vacation home, which you have owned for more than 25 years, you may get a tax break when you sell your former house
5. You can start your RMD when you’re 72 years old
6. If you are 65 years old or older don’t itemize your deductions and you will get a higher standard deduction
7. You’ll be getting an additional sum if you or your spouse happen to be fully retired and disabled
8. If your spouse is still working, but you are retired and feel like you didn’t put enough money aside, they can still contribute to your IRA with up to $7,000 a year
It is important that during your retirement you enjoy your free time and not deal with taxes, because they can be pretty irritating.
It’s only fair that after decades of hard work to finally savor your free time and money you worked your whole life for. We hope you find this article helpful and you will benefit from some of these tips.
If you are familiar with other tax breaks for retirees let us know down below in the comments.
You may also find helpful this related article: How All 50 States Are Taxing Retirees In 2021.