With effective retirement plans, seniors can lead a life free from financial troubles, which is very important to ensure a hassle-free retired life. This article lists out some important tax breaks for retirees and seniors that will surely help you save up on your income by making it tax-exempt or at least give you a break from paying it off in taxes.

Your tax filing threshold increases
People who are 65 years old or above have an income limit set at $13,600, and for couples who are both 65, this combined income limit is $26,600. Up till this limit, you do not need to file any tax returns. This is significantly more than the threshold for which younger workers are eligible.

You can avoid taxes on the minimum distributions to your retirement accounts
There is a penalty if an individual withdraws money from their retirement account after turning 72 years old. However, there are ways to use this as one of the most beneficial tax breaks for retirees and seniors. If you do not require that money; you can avoid the tax on the withdrawals. Retirees who want to transfer a certain amount, up till $100,000, to any charity may do so without paying taxes on it. A direct transfer from the IRA to a qualified charity can help.

You can contribute higher amounts to a health savings account
People with high-deductible health plans are allowed to claim deductions on the HSA (Health Savings Account) they choose. The distributions to these accounts are tax-free when it is being used for clearing off eligible medical expenses. Individuals aged above 55 may also contribute an extra $1,000 every year, and their spouse can also do the same if they meet the age criteria and have their own HSA.

Selling your house can also be beneficial
This is perhaps one of the most overlooked tax breaks for retirees and seniors, but it is crucial. While a tax deduction is available for selling your house irrespective of your age, it is particularly helpful if you want to downsize your properties during retirement. There is a provision to exclude capital gains made by selling your house to a limit of $250,000. This can be reduced from your taxable income and is valid for people who are single. Similarly, this exclusion goes up to $500,000 for married couples filing a joint return. Certain conditions required for this particular exemption include:

• This house should be your main residence for at least 2 years.
• It should be owned by you for a minimum period of 2 years.
• These periods of 2 years do not necessarily need to be consecutive, and the criteria have to be satisfied in the last 5 years.

Although all these tax breaks for seniors and retirees are beneficial, it is advisable to consult a tax expert before filing your taxes to get maximum benefits.