An official website of the United States government The A.gov website belongs to an official government organization of the United States. If a qualifying vehicle loan is refinanced later, interest paid on the refinanced amount is generally eligible for the deduction. The improved deduction for seniors increases the amount of income you can earn before you pay federal income tax. It's available to taxpayers age 65 and older and provides additional relief for older people living on fixed or modest incomes.
It's crucial to understand the details of this new tax deduction. Tax season is just a few months away, and getting off to a head start can help you prepare your own taxes or provide accurate information to your tax preparer. While this law doesn't eliminate taxes on Social Security benefits, it can reduce or eliminate the amount of benefits that are taxed by reducing your total taxable income. Unlike the standard deduction, the additional deduction for seniors will be available to taxpayers even if they itemize their deductions.
By reducing taxes on earned income, the additional deduction for seniors provides a marginal incentive for some older Americans to work (or work more). Unlike provisions such as the elimination of income tax on tips, this change does not usually encourage taxpayers to adopt certain types of behavior instead of others. Regardless of the tax advantages, no one can choose their age.
