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The U.S. tax code now exceeds 70,000 pages, with hundreds more added in 2025 alone. With so much complexity, it’s easy for retirees to miss valuable opportunities to reduce their tax burden.
Here are five key tax tips to consider if you’re still working on your 2025 taxes and as you plan for your 2026 tax return.
Tip No. 1: Understand the new $6,000 deduction for older people
Recent tax law changes introduced a temporary deduction for people age 65 and older, designed to help offset the taxation of Social Security benefits — but it doesn’t benefit everyone equally.
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Here’s how it works:
- You must be age 65 or older by the end of the tax year
- You can deduct up to $6,000 per person ($12,000 for married couples)
- This deduction is available even if you take the standard deduction
- It phases out starting at $75,000 (single) and $150,000 (married filing jointly)
Because of the income limits, proactive tax planning is essential. Many retirees can benefit by managing their income — either reducing it to stay below the thresholds or increasing it strategically to fully utilize the deduction during its availability from 2025 through 2028.
Tip No. 2: Know the rules on deducting car loan interest
Another notable change allows for the deduction of car loan interest — up to $10,000 per year — but with specific requirements.
To qualify, the vehicle must be assembled in the United States. You can check the VIN on NHTSA’s website, or you can verify the “final assembly point” on the window sticker.
Income phaseouts begin at $100,000 (single) and $200,000 (married filing jointly).
Keep in mind, this is a tax deduction — not a credit. For example, if you pay $2,500 in interest and are in the 22% tax bracket, your tax savings would be about $550.
While helpful, this shouldn’t drive your purchase decision — always prioritize your overall financial plan.
Tip No. 3: Reduce Medicare IRMAA surcharges
Higher-income retirees may pay additional Medicare premiums known as IRMAA (income-related monthly adjustment amount). These surcharges are based on your modified adjusted gross income (MAGI) from two years prior.
If your income has recently decreased due to retirement or another life-changing event, you may be able to lower your premiums.
Steps to take:
- Complete Form SSA-44
- Identify a qualifying life-changing event, such as retirement or reduced work
- Submit documentation as required
If approved, your Medicare premiums will be recalculated, and you may receive a refund for any excess IRMAA already paid.
While not technically a tax, IRMAA functions similarly by increasing costs based on income — making tax planning just as important.
Tip No. 4: Take advantage of above-the-line charitable deductions
With fewer taxpayers itemizing deductions today, many retirees have lost the ability to deduct charitable contributions.
However, starting in 2026, a new provision allows for “above-the-line” charitable deductions:
- Up to $1,000 for single filers
- Up to $2,000 for married filing jointly
- Applies even if you take the standard deduction
This creates a renewed incentive to track charitable donations. Be sure to keep receipts, as this will appear as a new line item on your 2026 tax return. The donation must be made in cash to a qualifying charity.
Tip No. 5: Use qualified charitable distributions (QCDs)
For retirees age 70½ or older, qualified charitable distributions (QCDs) remain one of the most powerful tax-saving strategies.
- You can donate up to $111,000 per person directly from an IRA to charity
- The distribution is excluded from your taxable income
- It can also count toward your required minimum distribution (RMD)
For example, if your RMD is $50,000, and you donate $25,000 through QCDs, you need to withdraw — and pay taxes on — only the remaining $25,000.
It’s important to note that QCDs are not clearly reflected on your Form 1099-R, so you must report them properly or inform your tax professional.
Many custodians offer convenient ways to facilitate these donations, including direct check mailing or dedicated checkbooks for charitable giving.
The bottom line
Tax planning in retirement requires more than just filing a return — it demands strategy. With new rules and opportunities emerging, staying informed and proactive can help reduce your tax burden, manage health care costs and preserve more of your retirement income.
