by NASHVILLE, Tenn. – Retiring in Tennessee has many advantages, from scenic mountain towns to no state income tax on wages or retirement benefits. But while the Volunteer State doesn’t tax Social Security or most retirement income, seniors over 65 still benefit from important federal tax breaks—including the extra standard deduction. Understanding how these deductions work can help retirees keep more of their income and reduce financial stress.
What Is the Standard Deduction?
The standard deduction is a flat amount that taxpayers can subtract from their income before federal taxes are calculated. Most Americans take the standard deduction rather than itemizing expenses, as it simplifies the filing process.
For seniors aged 65 and older, the IRS allows an extra standard deduction, giving older taxpayers greater relief and helping them manage retirement on a fixed income.
Federal Standard Deduction for Seniors
For the 2024 tax year, the standard deduction is:
- $14,600 for single filers
- $29,200 for married couples filing jointly
Seniors over 65 qualify for an additional deduction:
- $1,950 if single or head of household
- $1,550 per spouse if married filing jointly
This means a married couple where both spouses are over 65 could claim a total standard deduction of $32,300.
Tennessee’s Tax System for Seniors
Unlike most states, Tennessee does not tax earned wages, Social Security benefits, or most forms of retirement income. This makes it especially attractive for seniors who depend on fixed incomes such as pensions, IRAs, or Social Security checks.
However, this also means Tennessee does not have its own version of a state-level standard deduction or extra senior exemption. Retirees in Tennessee primarily benefit from the federal standard deduction system when filing their annual tax returns.
Read Also: Understanding the Washington Extra Standard Deduction for Seniors Over 65
Who Qualifies for the Extra Deduction?
To receive the federal extra standard deduction for seniors, you must:
- Be 65 or older by the end of the tax year
- File a federal tax return (Form 1040 or 1040-SR)
- Choose the standard deduction instead of itemizing expenses
If you are also legally blind, you may qualify for an additional deduction on top of the senior increase.
Why This Matters for Tennessee Seniors
Even though Tennessee doesn’t levy a state income tax, seniors may still owe federal income tax on certain types of income, including:
- Withdrawals from traditional IRAs and 401(k)s
- Pension payments
- Investment earnings such as dividends or capital gains
The extra standard deduction reduces taxable income at the federal level, which can lower or even eliminate a senior’s tax liability. This is especially important for retirees managing healthcare expenses, rising housing costs, or living primarily on fixed retirement benefits.
Filing Tips for Tennessee Seniors
- Use Form 1040-SR. Seniors over 65 can use the simplified 1040-SR tax form, which highlights the extra deduction amounts clearly.
- Double-check eligibility. If both spouses are over 65, be sure to claim the deduction for each.
- Combine with tax credits. Seniors may also qualify for the federal Credit for the Elderly or Disabled depending on income.
- Plan withdrawals wisely. Large withdrawals from retirement accounts can push you into a higher tax bracket; spreading them out can maximize savings.
Summary Table
| Category | Single Filer | Married Filing Jointly |
|---|---|---|
| Federal Standard Deduction (2024) | $14,600 | $29,200 |
| Federal Extra Deduction (65+) | +$1,950 | +$1,550 per spouse |
| Tennessee State Income Tax | None | None |
Final Thoughts
Tennessee’s lack of a state income tax already makes it one of the most retirement-friendly states in the nation, but seniors can also save big at the federal level with the extra standard deduction for those 65 and older. This tax break reduces taxable income, helping retirees stretch their budgets further while enjoying the Volunteer State’s low cost of living and scenic lifestyle.
Are you a Tennessee senior planning to claim the extra standard deduction this year? Share your thoughts in the comments at ibwhsmag.com.
