With age comes wisdom and plenty of small tax breaks for senior citizens and those who have retired. There are several tax breaks and deductions that senior citizens can avail to put their income to good use. There are also several advantages for people who are 50 years or older. However, living on a fixed income can get difficult, so we’ve listed out some of the best tax breaks you can get.

Let’s examine the tax deductions seniors and retirees should use:

1. Taxes may not have to be paid for social security income
It is fairly complicated to calculate social security benefits and decide if it is taxable or not. This is how it works: You are advised to add up all your income from all your sources. This includes retirement funds with interests that are tax-free. This amount is to be added to half of what was collected through social security benefits throughout the tax year. Then, form SSA-1099 will be sent to you via the Social Security Administration during the beginning of the year; this will show you how much you received.

If the total (the total of all other income and half of Social Security) comes to less than $25,000 the portion of Social Security need not be included as taxable income subject to certain provisions such as you must be the head of a household or a single and qualifying widower or widow. If you’re married, then the limit extends to $32,000, but only if you’re filing a joint return. It would be beneficial to file a joint return as some taxes might have to be paid on certain benefits while filing a separate return, unless you didn’t happen to stay with your spouse during the tax year. It would be best to check with a tax advisor about filing a joint return considering your unique circumstances. If none of the above situations are applicable to you, even 85% of your Social Security could be taxable.

2. Elderly and disabled tax credits
The tax credits that are available for people above the age of 65 and older or for physically abled people are highly useful. They range from $3,750 to $7,500 and are not deductions, but they do reduce your tax liability. For example, if you happen to owe $5,000 in taxes to the IRS and you have a credit of $5,000, the two will negate each other and you will not owe anything. In order to qualify for the said credit, you must be 65 by the end of the tax year. The importance of this credit depends on your income from other sources and the tax filing status. An Interactive Tax Assistant Tool is available on the IRS website that will allow you to check how much your tax credit could work out to. This credit is non-refundable, so you won’t be able to get the money back if the amount owed is less than the credit.