Issue link: https://nest.uberflip.com/i/1458600
Here's a quick rundown of some of the tax breaks you'll enjoy once you turn 50 and older: • Higher contribution limits for retirement accounts: The contribution limit for most employees with 401(k), 403(b), most 457 retirement saving plans and the federal government's Thrift Savings Plan has been raised to $20,500 in 2022 from $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 con- tribute 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 ad- ditional $1,000 if you reach 55 during the year. Just keep in mind that your contribu- tion limit is reduced by any amount your employer contributed that has been ex- cluded from your income. • Bigger standard deduction at age 65: Taxpayers get a standard deduction that re- duces their taxable income and lowers their tax bill. For 2022, most married couples will get a standard deduction of $25,100. For single taxpayers and married individuals filing separately, the standard deduction is $12,550. But if you are 65 or older and file as a single taxpayer, you get an extra $1,700 standard deduction for tax year 2021 and an extra $1,750 for tax year 2022. If you are married and filing jointly, the extra standard deduction is $1,350 if only one person is 65 or older. If both are 65 or older, the extra standard deduction is $2,700. For taxpayers who are both 65 and older and blind, the extra deduction is doubled. Another potential benefit is that you can use the new simplified Form 1040-SR for seniors if you are 65 or older and don't have a complicated tax return. The form features a larger typeface if you still file paper returns.