Well, 65 might be the new 50 to you, but to Uncle Sam, it means you're elderly. Embrace it! Being considered elderly could have a positive effect on your taxes, as in you may not need to pay as much in taxes as that 64-year-old whippersnapper.

You may not need to file at all, depending on your income. How cool is that? 

But where is all this coming from? It happened when the Tax Cuts and Jobs Act was signed in December 2017. It doesn’t sound like it addresses those who may be retired or disabled, but some of the changes count for you, too.

So, let’s dig in and see what’s on the table for you, now that you’re not as young as you once were. 

A Higher Filing Threshold

Earning money may not be your primary concern anymore, but you can earn more now without having to file for taxes. Most people have to file when their income reached $12,000. If you are 65 or older, you don’t have to file until you earn $13,600.

Bonus - if your only income is Social Security and you have to file (because of that whole earning cap thing), you might not be required to include your benefits. But what if you’re married?

If you file jointly and both you and your spouse are over 65, you can earn up to $26,600 together before having to file a return. If only one of you is 65, you can still earn up to $25,300 before you have to file. If both of you are under 64, sorry. You will have to file if you jointly earned $24,000 or more.

Here’s a fun fact, though. The IRS says you turn 65 the day before your birthday. Nobody wants to rush getting older. Still, in this case, if your special day is on January 1, you may be able to claim tax credits for the elderly and disabled right away. 

If your birthday is on January 1, 2020, you are considered to have turned 65 on December 31, 2019. You score your credits. That person over there with the January 2nd birthday will just have to wait until next year.

A Larger Standard Deduction

The bad news is that the personal exemption went away with the new tax law. You can no longer take an exemption for you, your spouse, or your dependents.

The good news is that the standard deduction nearly doubled for every segment of filers. Not only does the higher deduction make up for the loss of the personal exemption, but it may also help to simplify your taxes. If you've paid off your house, don't make substantial charitable donations, or have any other expenses that exceed the standard deduction, you can forget about itemizing.

It used to be that itemizing could get you a larger deduction than the standard one, but with the changes in tax law, that’s no longer true. And if you don’t need to itemize, you don’t need to fill out more forms or find more documentation to support them.

A larger standard deduction also means you pay tax on a lower income base. Remember, you are taxed on your adjusted gross income (your gross income minus the deduction and maybe some other things). Anything that can reduce your taxable earnings is good.

Now, if you are still paying mortgage interest, donate tons of money to charity, or have huge deductible expenses, you may be able to itemize and beat the new deduction amounts. 

Here are the numbers:

• Single filers and married filing separately - old deduction was $6,650, the new deduction is $12,000 in 2018.
• Head of household filers - old deduction was $9,350, the new deduction is $18,000.
• Qualifying widow(ers) and married filing jointly - old deduction was $12,700, the new deduction is $24,000.

You would need to have a lot of expenses to itemize to beat that. 

No Taxes on Social Security (Maybe)

It doesn’t seem fair to be asked to pay taxes on your social security, but that’s what the US has come to. The tax overhaul of 1983 introduced taxation of benefits beginning in the 1984 tax year. At the time, if a single taxpayer's modified gross income plus one-half of their benefits exceeded $25,000 (or if married, $35,000), they might have to pay taxes on up to 50% of their social security benefits. 

In 1993, a change was made so that singles with a modified adjusted gross income was more than $34,000 ($44,000 for a couple filing jointly) would have up to 85% of benefits exposed to taxes. 

Everything worked OK for a while, but those thresholds were never adjusted for inflation. So, more and more people had to pay taxes on their social security benefits every year. If you live in one of the 13 states that tax benefits, you got hit twice.

The Tax Cuts and Jobs Act provides some hope that you won’t have to pay any, or at least not as much, tax on your benefits. 

• Add up income from all sources. Don’t forget taxable retirement funds.
• Add to that total half of what you collected in social security benefits during the tax year. See your Form SSA-1099 from the IRS.
• Single, head of household, or qualifying widow(er) - If your total income plus one-half of your benefits is less than $25,000 and you are not required to include any social security as taxable income.
• Married filing jointly - if your total income plus one-half of your benefits is less than $32,000, you are not required to include any social security as taxable income.
• If your relationship is complicated, like if you did not live with your spouse at any time during the tax year, talk to a tax specialist. Because your taxes just got complicated.

If you don’t meet any of these parameters, up to 85% of your social security benefits may be taxable. Check using the interactive tax tool from the IRS.

The Cherry on the Tax Cake

If you:

• Are 65 or older on the last day of the tax year
• Are a US citizen, resident alien, or non-resident married to a US citizen or resident alien.
• Are married and file jointly and lived with your spouse during the tax year, or qualify for head of household

You may be eligible for the Tax Credit for the Elderly and Disabled. This is a significant credit that could pay off your tax liability.

Remember, it’s a credit. So, if you don’t owe any taxes, you don’t get what’s left of the credit. It can only take your taxes to zero, it can’t be given as a refund. 

You do not qualify if your adjusted gross income is too high. Other limits apply to the nontaxable portion of your social security benefits, nontaxable portions of pensions, annuities, or disability income. See chapter five of Publication 554 Tax Guide for Seniors.  

You may not want to think about it, but tax season comes right after the holiday season. Keep these changes in mind, maybe you’ll feel jollier as you put up the tree.