by Denver, CO – Seniors in Colorado looking for ways to lower their tax burden in 2025 can benefit from the extra standard deduction available to taxpayers aged 65 and older. This federal deduction adds to the standard deduction every filer receives, providing additional relief for retirees who are often living on fixed incomes. Combined with Colorado’s retirement-friendly tax rules, this benefit can help older residents keep more of their hard-earned money.
This article explains how the extra standard deduction works, who qualifies, the amounts for 2025, and what other state-level tax advantages Colorado offers seniors.
What Is the Extra Standard Deduction?
The extra standard deduction is a federal tax break available to individuals 65 years or older by December 31 of the tax year. It is added to the standard deduction that all taxpayers are entitled to, which reduces taxable income and lowers the amount of federal tax owed.
This benefit is especially important for seniors, as it helps offset rising living expenses such as healthcare, housing, and groceries.
Who Qualifies in Colorado?
To qualify for the extra standard deduction, seniors must:
- Be 65 years of age or older by the last day of the tax year.
- File taxes as single, head of household, or married filing jointly.
- Provide documentation of age if requested (driver’s license, state ID, or birth certificate).
Married couples filing jointly can each claim the deduction, allowing them to double their tax savings if both spouses are age 65 or older.
Deduction Amounts for 2025
For the 2025 tax year, the IRS allows seniors to claim the following extra deduction amounts:
- Single or Head of Household: $1,550 additional deduction.
- Married Filing Jointly (per spouse age 65+): $1,250 each.
This means that a single senior filer can reduce taxable income by $1,550, while a married couple where both are 65 or older can claim $2,500 in additional deductions.
These amounts are added to the regular standard deduction, which is indexed annually for inflation. Taxpayers can find the latest updates directly through the IRS standard deduction guidelines.
Read Also: Understanding the Tennessee Extra Standard Deduction for Seniors Over 65
Why It Matters in Colorado
While the extra deduction is a federal benefit, it pairs well with Colorado’s state tax system, which is already considered relatively senior-friendly. Colorado provides several tax breaks for older residents, meaning the combination of state and federal relief can significantly reduce retirement tax burdens.
For example, seniors in Colorado may qualify for deductions on retirement income and property tax relief programs, making the extra standard deduction a valuable complement to state-level benefits.
Other Tax Benefits for Seniors in Colorado
In addition to the federal deduction, Colorado seniors can take advantage of:
- Retirement income deduction – Seniors 55–64 can exclude up to $20,000 of retirement income, and those 65 and older can exclude up to $24,000 per year. This applies to pensions, 401(k)s, IRAs, and certain annuities.
- Social Security exemption – All Social Security retirement benefits are fully exempt from Colorado state income tax.
- Homestead Exemption – Seniors 65 and older who have lived in their home for at least 10 years may qualify for a property tax exemption on the first $200,000 of their home’s value.
- No estate or inheritance tax – Colorado does not impose these taxes, offering peace of mind for families.
Key Takeaways for Seniors in Colorado
- Seniors 65 and older qualify for an extra federal standard deduction on top of the regular one.
- The deduction is $1,550 for single filers and $1,250 per spouse for married couples filing jointly in 2025.
- Colorado offers additional tax relief, including retirement income exclusions, Social Security exemptions, and property tax breaks.
- Combined, these benefits make Colorado a tax-friendly state for retirees.
Final Thoughts
For Colorado seniors, the extra standard deduction for those over 65 offers a simple yet meaningful way to cut federal taxes in 2025. Combined with the state’s retirement income deduction, Social Security exemption, and property tax relief, Colorado stands out as a retirement-friendly state that helps older residents maximize their financial security.
Do you think Colorado is doing enough to support seniors with tax relief, or should additional measures be introduced? Share your thoughts in the comments at ibwhsmag.com.
