Transcription
There are at least five bills the average American over the age of 65 is still paying every single year that they are not legally required to pay. Five bills.
And before I go one sentence further, I need to clear up the single biggest misunderstanding about this because it is the reason most people click away and leave thousands of dollars sitting on the table. People assume a video like this is only for one kind of senior. Either they think it is only for low-income folks who are struggling. So if they are comfortable, they tune out. Or they think it is some advanced wealth trick. So if they are living mostly on social security, they tune out. Both of those are wrong. And I want to be crystal clear right now. This list is for both of you. Whether your entire income is a social security check or you have got a pension, some savings, and a home that has tripled in value, there is real money on this list with your name on it. For some of these bills, the win is biggest for the lower income retiree. For others, the win is biggest for the comfortable middle class retiree. I am going to tell you on every single one exactly which group it helps and how so nobody watching can say this is not for me because the honest truth is that seniors at every income level are overpaying these bills just in different ways.
The reason almost no one tells you about these is brutally simple. Every single person whose job it is to collect that money from you has a direct financial incentive to keep their mouth shut. Your county does not call to tell you they will freeze your property taxes. The Social Security Administration does not remind you that you can stop the withholding coming out of your check. The tax preparer charging you $300 does not lead with the fact that you may legally qualify to have your return done for free. And the biggest one of all, a brand new deduction worth up to $6,000 a year is sitting right there. And most of the seniors who qualify for it will never claim a single dollar.
In the next 18 minutes, I'm going to walk you through all five one at a time in plain English. And then I'm going to add three bonus moves at the end for the retiree who has built up some money because those last three can be worth a fortune and almost nobody talks about them. Here is the one idea that ties everything together. Being legally exempt from a bill and actually not paying it are two completely different things. The law does not refund you automatically. Nobody mails you a check. You have to know the rule exists and you have to claim it. That is the entire reason this video exists.
My name is Marcus Graves. I am an enrolled agent, which means I am licensed by the federal government to represent taxpayers directly in front of the Internal Revenue Service. I sit across the table from the IRS on behalf of real people. And I will tell you the single most painful pattern I see over and over again. It is not people who cheat. It is honest, careful people in their 60s and 70s at every income level paying bills they never owed year after year simply because no one ever told them they could stop. That is the most expensive kind of mistake there is because it is invisible. There is no notice. There is no penalty. There is just money quietly leaving your account every year that never had to.
So, let's fix that right now. Five bills plus three bonus moves. Stay to the end because the very last one is the one that quietly costs people the most money and it is one of the easiest of all to avoid. Let's start with the biggest one.
Bill number one is your federal income tax. And I need you to really hear this because for millions of seniors, the correct amount of federal income tax you owe going forward is far lower than what you are paying. And for a great many of you, it is zero. And many of you are still paying it or still having it withheld out of pure habit and fear. Here is what changed. There is a new law, the one you have heard called the one big beautiful bill. And buried inside it is something called the senior bonus deduction. Starting with the 2025 tax year, the one you file in early 2026. Every single person who is 65 or older gets an extra deduction of up to $6,000. If you are married and both of you are 65 or older, that is $12,000. And here is the part that makes it so powerful. That $6,000 stacks on top of everything you already get. It sits on top of your regular standard deduction. It sits on top of the extra standard deduction seniors have always gotten for being over 65. You do not have to itemize to claim it. You do not have to give anything up to get it. It is simply added on.
Now, here is who this helps and it is both groups. If you are a lower income senior living mostly on social security, stacking these deductions very likely pushes your federal income tax all the way to zero. And it may mean you do not even need to file. And if you are a comfortable middle class retiree, you are not left out either because this deduction is available in full to single seniors with income up to $75,000 and to married couples up to $150,000. It only begins to shrink above those numbers and does not fully vanish until you are over $175,000 single or $250,000 married. So, the only people this truly leaves out are the genuinely wealthy. Everyone from the retiree on a modest fixed income to the couple living on $90,000 a year gets real money here. And one more thing you must know because it makes this urgent. This is temporary. As the law stands today, the senior bonus deduction is only here for 2025, 26, 27, and 28. Four years unless Congress extends it. So this is a claim it now every single year while it exists thing. If you use software it asks your agent applies it. If someone prepares your return you make sure they applied it. That is bill number one and it is the single most valuable point in this entire video. Do not pay federal income tax you do not owe.
That leads straight into bill number two because it is the other half of the same coin. Bill number two is the tax on your social security benefits. Now, a lot of people believe social security is always taxed and a lot of others believe it is never taxed and both are wrong. Here is the actual rule. Whether your social security is taxed depends on something called your provisional income, which is basically your other income plus half of your social security. There is a lower line and an upper line. If you are single and that number comes in under $25,000 or married and it comes in under $32,000, then 0% of your social security is taxable. None of it. As your income climbs, more of the benefit can be taxed up to a maximum of 85% for higher income retirees. Which means even at the very top 15% of your social security is always tax-free.
So here is the win for each group. If you are a lower income senior, there's a very good chance the correct tax on your social security is zero and the new senior deduction makes that even more likely. If you are a comfortable retiree with more income, I am not going to insult you by pretending it all disappears, but the new deduction can still drop the taxable portion to a lower tier. And here is the mistake that hits everyone, rich or poor. When people file for social security, a great many of them check a box or fill out a form called the W4V, telling the government to withhold federal tax from every single monthly check just to be safe. Then a big chunk comes back as a refund the next year if they remember to file at all. Think about what that is. You are letting the government hold your money with no interest all year long on tax you may not even owe or far more than you owe. The fix is simple. You look at your real numbers or you have someone look at them with you and you file a new W4V to right size or stop that withholding so it matches what you will actually owe and not a dollar more. Whether you owe nothing or owe a little, the goal is the same. Pay what you owe on time and not 1 cent early as a gift to the treasury. That is bill number two.
Bill number three is one that makes people angry once they find out and it is your property tax. Now, I want to be precise here because this is exactly where seniors at both ends get told they do not qualify when very often they do. Here is the truth. There are really three kinds of senior property tax relief and between them they cover almost everyone. The first kind is income-based often called a circuit breaker and that one is aimed squarely at lower and fixed income seniors. If your income is modest, this can knock your property tax down dramatically. And in some places, a low-income senior can have a huge share of their home's value exempted or the tax deferred entirely. The second kind is a flat senior exemption that knocks a chunk of value off the top regardless of income. And the third kind, the one comfortable retirees always assume they are too well off for, is an age-based freeze with no income test at all. Let me give you the clearest example. In Texas, once you turn 65, you get a tax ceiling that freezes your school property taxes at the level you paid the year you turned 65. Your home value can double. Your frozen tax does not go up and there is no income limit on that freeze. It does not matter how comfortable you are. You qualify because of your age. Period. Texas is far from the only state with a freeze like that. So look at how that covers both groups. The lower income senior gets the income based relief that can wipe out most of the bill. The comfortable senior who is shut out of the income-based program still gets the age-based exemption or freeze that the wealthier homeowner assumed was not for them.
Here is the catch that cost everyone. None of these are automatic. Your county does not look at your birthday, see that you turn 65, and apply the discount. You have to file, and almost every one of these programs has a hard deadline, often early in the year. Miss it and you pay the full bill that year and wait until next year to try again. Why would your county not chase you down to claim it? Because every dollar of relief you claim is a dollar of revenue they lose. So, you make one phone call. You call your county assessor or you search your county assessor plus the words senior exemption and freeze and you ask two questions. What relief do you have for homeowners over 65? And which programs are based on age with no income limit? That one call has been worth hundreds, often thousands of dollars a year to people I have worked with at every income level. That is bill number three.
Bill number four is your Medicare premiums. And there are two completely separate overpayments hiding here. And conveniently, one helps everybody and the other helps the higher income retiree. The first is simple and it is for everyone. Medicare Part A, the part that covers hospital stays, is supposed to cost you $0 in premiums if you or your spouse worked and paid into the system for at least 10 years, which is 40 quarters. The vast majority of Americans have done exactly that. Yet, some people pay a Part A premium they never needed to because of confusion about a work record. That is worth a hard second look, no matter what you earn.
The second overpayment is aimed right at the comfortable retiree and it has a name that sounds like a person. It is called IRMAA, the income related monthly adjustment amount, a surcharge. They pile on top of your Part B and Part D premiums once your income crosses certain levels. By definition, this one only hits people with a solid income. And here is the trap inside the trap. The income they use is not this year's income. It is your tax return from two years ago. So picture this. You are 64, 65, still working, earning a good salary. Then you retire and your income falls off a cliff. But 2 years later, Medicare looks back at that old high income tax return and hits you with a surcharge based on money you are no longer earning. People just pay it because it shows up as a quiet deduction from their social security and they assume it must be correct. It is not necessarily correct. And there is a form to fix it. It is called the SSA-44. When you have had what the government calls a life-changing event and retirement is specifically on that list along with the death of a spouse, divorce or a drop in income, you file that form. You show them your income has fallen and they recalculate your premium based on your real current situation. I have seen that single form put thousands of dollars a year back in a retiree's pocket. Almost nobody files it because almost nobody knows it exists. So Part A being free is the win for everyone and the IRMAA appeal is the win for the higher earner. That is bill number four.
Bill number five is the one that is going to feel, uh, almost personal because it is the fee you pay to deal with all the others. Bill number five is your tax preparation fee. Every year, millions of seniors walk into a storefront tax office or a big-name chain and pay somewhere between $200 and $500 to have a fairly simple retirement tax return prepared. And, uh, many of those people legally qualify to have that exact same return prepared for free by people the Internal Revenue Service itself has trained and certified. There is a free program built specifically for seniors called TCE, Tax Counseling for the Elderly. It is an Internal Revenue Service program for people 60 and older and it specializes in exactly the questions retirees have: pensions, social security, retirement account withdrawals. The largest provider of it is AARP Tax-Aide which runs thousands of sites across the country and you do not have to be an AARP member to use it. Its focus is older adults of modest to moderate means. And that phrase matters because it is not just the lowest incomes. It covers the broad middle too. And on top of that, the government now has its own free online filing options for people comfortable doing it themselves.
Now, I am an enrolled agent, so there is a part of me that is talking myself out of business by telling you this. But a person with a standard retirement return, two social security checks, a pension, maybe a few investment statements, should not assume they have to hand a chain $300 for 45 minutes of data entry. Here is the honest line, though, and it applies to everyone. If your situation is genuinely complicated, a business sale, rental properties, a complex estate, then yes, pay a real professional, it is worth every penny. And I would tell you to do exactly that. But if your return is straightforward, the law has already built you a free qualified option. And your age makes you eligible regardless of whether you are scraping by or doing just fine. Using it is not cheap, it is smart. That is bill number five, and it is one of the easiest to act on this year.
Now, I promised you three bonus moves, and I want to be straight about who these are for. The five bills I just covered reach across every income level. These last three are specifically for the retiree who has built up some money: a home that has appreciated, an investment account, a healthy IRA. If that is not you, do not feel left out. The first five already had you covered, and you can skip ahead to the checklist. But if you have built up something, these three can be worth more than everything else combined. And the low-income focused videos never mention them because their audience cannot use them. You can.
Bonus move number one is the tax on selling your home. Here is the fear that lives in people's heads. You bought your house decades ago for $60,000 and now it is worth $400,000 and you are terrified that if you sell it, the government will tax you on that enormous gain. So, you do not downsize. You stay in a house that is too big and too expensive because you are afraid of a tax bill. And in most cases, that tax bill does not exist. There is a rule called the home sale exclusion. If you have lived in your home as your main home for at least two of the last five years, you can exclude up to $250,000 of gain from tax if you are single and up to $500,000 of gain if you are married filing jointly. Gain, not sale price. The gain is what you sold it for minus what you paid minus the improvements you put in. So that couple whose home went from $60,000 to $400,000 has a gain of around $340,000 and as a married couple they can exclude $500,000. Their federal tax on that sale is zero. They were sitting in a house they no longer wanted, scared of a tax that was never going to hit them.
Bonus move number two is for the retiree with money in regular investment accounts, stocks or funds that have gone up in value and it is one of the best kept secrets in the tax code. It is called the 0% capital gains bracket. When your taxable income is low enough, the federal tax rate on your long-term capital gains is not 15% and not 20%. It is zero. For 2025, a married couple can have taxable income up to roughly $96,700 and still pay 0% on their long-term gains. And for a single person, that line is roughly $48,000. And that is taxable income, which is your income after your deductions come out. So, a couple bringing in well over $100,000 total can still drop into the 0% zone after the standard deduction and the senior bonus and sell appreciated investments without paying a dime of federal tax on the gain. Retirees are in the perfect spot to use this because in the years after you stop working and before large required withdrawals kick in, your income is often at its lowest. That is the window. A smart retiree harvests gains in those low-income years on purpose, completely tax-free, instead of letting it all pile up and get taxed later.
Bonus move number three is for anyone 70 and a half or older who gives to charity, even a little, and has money in a traditional IRA. It is called a qualified charitable distribution, a QCD. Once you are 70 and a half, you can have money sent directly from your IRA to a charity up to $108,000 a year. And that money is completely excluded from your taxable income. Now, you might say, "I already deduct my donations." Here's the thing. Most retirees today take the standard deduction, which means they're giving earns them no tax benefit at all because they are not itemizing. The QCD fixes that. The money never shows up as income in the first place, which is even better than a deduction because it lowers the income number that everything else is based on. Your social security taxation, your Medicare surcharge, all of it. And once you reach the age where you are forced to take required minimum distributions, a qualified charitable distribution counts toward that requirement. So instead of being forced to pull money out, pay tax on it, and then donate what is left, you send it straight to the charity, satisfy your required withdrawal, and pay no tax on any of it. If you give to your church or any cause, and you have an IRA, this is one of the most powerful tools you have.
So, let me tie all of this together with the one idea that matters more than any single rule I just gave you. In every one of these cases, the law already says you are exempt or you qualify or you do not owe. The senior deduction is in the law. The social security rules are in the law. The property tax relief is on the books in your own county for the modest income senior and the comfortable one alike. The Medicare appeal form is sitting on the government's own website. The free tax help is funded and waiting. The home sale exclusion, the 0% capital gains bracket, the charitable distribution. Every one of them is real, but not a single one of them is automatic. The government does not refund you for a rule you did not claim. No one mails you a check for the deduction you forgot to take. The entire system is built so the money stays where it is unless you stand up and claim it. Being legally exempt is worthless until you actually act on it. And it does not matter whether your income is small or comfortable. There is a version of this list that is overcharging you right now.
And that is exactly why I want to give you something before I wrap up. I put together a free checklist, my retirement tax checklist. And it walks through every major tax break, exemption, and money-saving move that seniors run into, including all five of the bills and all three bonus moves we just covered. It lays out what to claim, what form to use, and what deadline to watch. So, you can go down the list one by one and make sure you are not leaving a single dollar on the table, whatever your income looks like. To get it, go to marcusgraves.com/checklist. Let me say that again because it matters. marcusgraves.com/checklist. The link is also right there in the description below this video. Grab it, print it, keep it with your important papers, and go through it before you file this year. It is completely free. And for almost everyone watching this, it is worth far more than it costs you, which is nothing.
Let me leave you with this. The people who collect these bills are counting on one thing, and it is not that you are dishonest, and it is not that you are careless. They are counting on the fact that you assume the relief is for someone else. The struggling senior assumes the good stuff is for people with money. The comfortable senior assumes the relief is only for people who are struggling. And so both of them keep paying. That is the entire game. Knowing the rule and knowing it applies to you no matter where you sit is the whole thing. You now know five bills and three bonus moves. And you know that knowing is not enough, that you have to claim them. So do one more thing for me. Send this video to one person in your life who is over 65 or getting close, a parent, a neighbor, a friend from church. It does not matter if they are getting by on a single check or sitting on a paid-off house and a nest egg because the odds are very good that they are paying at least one of these bills right now for no reason at all. And one share from you could be worth more to them than any gift you will ever give. That is what this channel is here to do. I will see you in the next.