Individual

Yes! Here are a few to look out for:

Larger standard deduction: The standard deduction for seniors is $1,700 higher than the deduction for those younger than 65 who file as individuals ($14,250 for 2021).

Property tax breaks: Property tax rules differ by state and local jurisdiction. In some areas, people above a certain age who earn below a particular income level qualify for property or school tax exemptions. Be sure to look at specific rules in your area.

Credit for the elderly and disabled: To qualify for this credit, you must have an AGI below $17,500 ($25,000 if both spouses are 65 and older) and Social Security and pension income under $5,000 ($7,500 for couples).

Additional IRA deduction: Employees 50 and older can save an additional $1,000 in an IRA for a total of $7,000 in 2021.

401(k) catch-up contributions: Older workers with a 401(k) plan can make catch-up contributions. If you were 50 or older in 2021, the catch-up limit is $6,500 for workplace plans.

No early withdrawal penalty: Once you turn age 59½, you can withdraw money from your IRA for any reason without the 10% penalty. Finally!

Qualified charitable distributions: Retirees aged 70½ and older who give up to $100,000 directly from their IRA to a qualified charity won’t owe income tax on the gift.

HSA contribution limit: Individuals aged 55 or older by the end of the 2021 tax year can contribute up to $4,600 to a health savings account (up $50 from 2020).

Higher long-term care insurance premium limit: The limits on deducting long-term care insurance premiums are higher for 2021. Taxpayers age 71 or older can write off up to $5,640 per person ($5,430 for 2020).

The lifetime estate and gift tax exemption for 2021 jumped from $11.58 million to $11.7 million ($23.4 million for couples). The gift tax exclusion remains $15,000 per recipient. This means you can give up to $15,000 to each child, grandchild, or any other person in 2021. So long as you stay below the limit, neither you nor your recipient will be required to file a gift tax return or tap the lifetime estate and gift tax exemption.

Tax rates on long-term capital gains and dividends did not change for 2021, but the income thresholds to qualify for the various rates did increase. Remember, if you sold stocks, mutual funds, or other capital assets that you held for at least one year, any gain is taxed at a 0%, 15%, or 20% rate.

The 0% rate applies for those with taxable income:
• Up to $40,400 for individual taxpayers
• Up to $54,100 for head of household filers
• Up to $80,800 for married filing jointly returns

The 15% rate applies for those with taxable income:
• $40,401 to $445,850 for individual taxpayers
• $54,101 to $473,750 for head of household filers
• $80,801 to $501,600 for married filing jointly returns

The 20% rate applies for those with taxable income:
• Over $445,850 for individual taxpayers
• Over $473,750 for head of household filers
• Over $501,600 for married filing jointly returns

Life insurance is a risk management tool intended to replace your income or cover a liability in case of death. If you need to replace your lifetime of income, you should do a calculation of how much you would need to sustain that income over the lifetime (or need time) of your heirs. As for type, if you have a lifetime need then a permanent policy is the safest bet, but keep in mind it is the most expensive. If you need to cover a 10-30 year need, then level term insurance makes more sense.