One of the added advantages of retirement is the number of benefits available in the form of tax breaks for retirees and seniors. There are several provisions available for retirees like tax credit and lower deductions, as compared to the younger generation. This makes financial planning for retirement and later years more manageable.

When it comes to tax breaks for retirees and seniors, one of the biggest advantages is in the form of deductions. There are two options available: standard and itemized deductions. Through the following questions, we will be taking a look at both to decide which one is more suitable.

• What is a standard deduction?
  There is a certain standard deduction set by IRS for all tax-payers, wherein a portion of their income is not subject to any taxes. This helps in the reduction of the total tax bill. For seniors, there is a higher standard deduction available as compared to others.
• What are the pros and cons of a standard deduction?
  As per the current rules, seniors can go for a standard deduction on a smaller base of income as well. So, adding up the new standard deduction to a regular deduction will help them save up a lot of money as opposed to itemizing the deductions. At the same time, seniors cannot opt for personal exemptions like medical and work bills in such situations.
• What are itemized deductions?
  These are expenditures available for certain products, services, or even specific contributions. They can be subtracted in total from the adjusted gross income to bring down the tax bill significantly.
• What are the pros and cons of itemized deduction?
  It is particularly helpful if there is a list of eligible deductions like mortgages, medical bills, or charitable donations. However, really large expenses are required to make it to the tax break threshold, and most financially disciplined seniors are unable to meet this criterion.

Which one is better?
It is crucial to remember that both options cannot be chosen, so one would need to make a choice. For most older taxpayers, a standard deduction is more beneficial. The standard deductions, along with the ones available with age criteria, save a lot more money for a senior citizen as compared to the itemized expenses that they can claim. We would recommend going for a standard deduction as one of the primary tax breaks for retirees and seniors because it is particularly helpful in cases where mortgages have been cleared off.
In such a case, they do not have the itemized interest deduction available on mortgages. However, we recommend people who do have a mortgage to go for an itemized deduction. This way, they can also include charitable donations, medical bills, and property taxes separately. In any case, it is best to total up the entire amount and evaluate whether it is higher than the available standard deduction.