Transcription
If you were born before 1961, the day you turned 65, you became legally exempt from a whole stack of bills and taxes you are almost certainly still paying. And nobody whose job it is to collect that money is ever going to call and tell you to stop.
I want to be very clear about what I just said because it is the single most expensive misunderstanding I see year after year. Turning 65 did not just make you eligible for Medicare. It quietly moved you into an entire category of people that the federal government, your state, your county, and several other agencies are required by law to treat differently.
There are bills younger people have to pay that you no longer do. There are taxes that get smaller or freeze in place or disappear completely the moment you cross that line. But here is the catch that cost people thousands of dollars every single year. Being legally exempt and actually not paying are two completely different things. The law does not refund you automatically. Nobody at the county mails you a check. The agency that has been collecting that money for 40 years does not send a letter on your birthday saying, "Congratulations, you can stop now." You have to know the exemption exists and you have to file the form. That one gap between qualifying and claiming is the reason most people who are fully entitled to these never see a dollar of them.
And before you decide this video is not for you, let me clear up the biggest myth of all. Because this is exactly how people talk themselves out of money that is sitting right there with their name on it. People assume a list like this is only for low-income retirees who are really struggling. So if you own a comfortable paid-off home, you tune out and you assume none of it applies to you. Then other people assume the opposite. They think this is only for the wealthy, the folks with big estates and fancy accountants. So if they live mostly on a Social Security check, they tune out, too. Both of those people are wrong, and both of them are leaving money on the table.
Some of the things on this list help the lower-income retiree the most. Others are worth the most to the person sitting on a house that doubled in value over the last few years. On every single one, I am going to tell you exactly who it helps the most so that nobody watching can honestly say, "Well, that part is not for me." And if you are renting right now, do not click away either because one of the things on this list quietly controls how fast your rent is allowed to climb.
So, let me tell you who I am and why I am the one telling you this. My name is Walter Baron. I am a state bar licensed estate attorney. And for over 15 years, I have sat across the table from county assessors, from probate clerks, and from government agencies on behalf of regular families. And I will tell you the most painful pattern I have seen in all those years. It is not the people who try to cheat or game the system. Those people are rare. The painful one is the honest person in their 60s, 70s, and 80s who has done everything right their whole life and who is paying bills they were legally exempt from years ago simply because not one single person ever sat them down and told them which form to file. That is the most expensive kind of mistake there is because it is completely invisible. There is no late notice. There is no penalty. There is no alarm that goes off. There is just money quietly leaving your account every month, every year that never had to leave at all.
So, let us fix that right now. Today, I am going to walk you through five of these one at a time in plain English with the exact thing you need to ask for on each one. Then, I'm going to give you a few bonus moves at the end for the homeowner who has some real assets because those last ones can be worth a small fortune and almost no one talks about them. And I want you to stay with me all the way to the end because the fifth one on this list is the highest value of them all and it also happens to be one of the very easiest to claim. If you only act on one thing from this entire video, it is probably going to be that one.
Let us start with the newest one because it is so new that almost nobody has caught up to it yet. And that is exactly why it is being missed. Starting with the 2025 tax year, every American who is 65 or older qualifies for a brand new bonus deduction of $6,000. And I want to be precise here because people get this wrong. This is not instead of your standard deduction. It is on top of it. It is an extra $6,000 knocked off your taxable income just for being 65. And if you are married and both you and your spouse are 65 or older, that is $6,000 each, $12,000 as a couple stacked right on top of everything else you already get. This is brand new. It runs through the 2028 tax year. And here is the part that surprises people. You get it whether you take the standard deduction or you itemize. It does not matter which way you file.
Now, it does begin to phase out at the higher income levels. As a single filer, it starts shrinking once your income climbs past $75,000. And for a married couple, past $150,000 at the very top, above the high cut-offs, it disappears entirely. But think about who that leaves. The vast middle, the retiree living on a normal modest income. For that person, this is real money taken straight off the amount the government is allowed to tax.
Here is what genuinely bothers me about this one. The people it helps the most are the exact people least likely to catch it. The 65-plus filer living on a normal income who files their own simple return or hands it to a basic preparer who is moving fast through a stack of them. That is precisely the person who will not notice whether this new deduction was applied and who will quietly overpay without ever knowing. So the action here is simple and you can do it in 2 minutes. When your return is done, before you sign it, look at it and confirm that the additional senior deduction was actually taken. If you use software, make sure your date of birth is entered correctly because that is what triggers it. This is not a fight with anyone. It is a line on a form and you just have to make sure it is there.
Number two is your property tax bill. And this is where the biggest dollars on the entire list are hiding. So pay close attention because there are actually three separate forms stacked on top of each other here and most people do not have a single one of them filed correctly. The first is the homestead exemption. What it does is take a chunk of your home's value right off the books before the county ever calculates what you owe. In Florida, that chunk is $50,000. In Texas, it is $100,000 off the school portion of your bill. Every state is different, but in nearly every state, it is real money. And here is where people get caught. Most homeowners assume the homestead exemption is automatic, that it just happens when you buy the house. In most states, it is not automatic. You have to file a one-page form with the county one time, usually before a spring deadline. File it once, and in many states, it stays on as long as you own the home. Miss it, and you pay the full bill that year for no reason at all.
The second form sits right on top of that first one. It is the senior or age 65 exemption. Most states that offer a homestead exemption also offer an additional one that kicks in the year you turn 65. And this is the one the county will almost never mail you on its own. It is a completely separate application and you have to ask for it by name. In Texas, every homeowner 65 and older gets an additional $10,000 off the school portion on top of the homestead. In Florida, the senior exemption can be another $50,000 on top of the basic $50, doubling the wipe-off. And here is the part where comfortable retirees wrongly tune out. They hear the word senior and assume there is an income test they will fail. But in more than half the states that offer this, there is no income test at all. Texas, Florida, Georgia, Tennessee, Alabama, and others. You turn 65, you file, you get it. Age is the only qualification.
The third one is the most valuable of all, and it is the senior assessment freeze. Here is what it does. When you turn 65 and you file the freeze application, the county locks in your home's taxable value at whatever it is the year you apply. From that day forward, it does not matter how much your neighborhood gentrifies. It does not matter how high values climb on your street. Your tax is calculated on that frozen number. In Texas, once you file the over 65 tax ceiling, your school district tax is frozen at the actual dollar amount you paid that year. Your home can double. The bill cannot rise.
So, who does all of this help the most? Honestly, everyone. The basic homestead helps the lower-income homeowner the most, in raw percentage. But the freeze is worth a small fortune to the person sitting on a paid-off home that tripled in value these last few years because they are the ones staring down the biggest increases. And renters, I told you this one was yours, too. Here is why. Your landlord pays that property tax and your landlord passes every dollar of the increase straight into your rent. When those bills are frozen or lowered across a community, rents stop climbing the way they have been.
Number three is your Medicare Part B premium. This is the one that gets quietly pulled out of your Social Security check every single month before the money ever lands in your account. So, a lot of people forget they are even paying it. In 2026, that premium is around $185 a month, gone automatically every month. But here is what almost nobody is told. There is a set of programs called Medicare Savings Programs. And if your income is under the limit, your state will pay that Part B premium for you, not lower it, pay it. There are three tiers, and they go by the initials QMB, SLMBB, and QI. The most generous one, QMB, does not just cover your premium. It also wipes out most of your deductibles and your co-pays on top of it.
Here is what genuinely bothers me about this one, and it is why I am spending extra time on it. The income limits are far higher than people assume. A lot of folks glance at the word and decide they make too much when they would actually qualify. On top of that, a number of states do not count your assets at all anymore. So, your savings or your paid-off house do not disqualify you. And despite all of that, this remains one of the most underclaimed benefits in the entire system. Millions of people who qualify right now never apply purely because no one ever told them the program exists. Who does it help the most? Anyone living mostly on Social Security, this is enormous for you. The action is one phone call. Call your state Health Insurance Assistance Program, your local SHIP office. They are free and they will screen you for a Medicare Savings Program and help you apply. That one call can put close to $200 a month back into your check. Over a year, you do that math.
And while you have them on the phone, ask about one more thing in the same family because it usually travels right alongside it. It is called Extra Help and some people know it by its other name, the Low-Income Subsidy. This one is aimed at a completely different bill. The cost of your prescription drugs under Medicare Part D. If you qualify, and many of the very same people who qualify for a Medicare Savings Program also qualify for this, it can dramatically lower what you pay for your medications, for your drug plan premium, and for your deductible. And here is the reason I bring it up the moment we finish the last one. In a lot of cases, getting approved for a Medicare Savings Program enrolls you in Extra Help automatically. So that is two of the single biggest health cost breaks in the entire system. Both unlocked by one phone call and one application for somebody who is taking several prescriptions a month. That is not pocket change. That can be one of the largest benefits on this whole list and it is bundled right in with the call I just told you to make.
Number four is smaller in dollars, but it is still a bill you can legally stop carrying in full. So I am not going to skip past it. There is a federal program called Lifeline that takes about $9.25 a month off your phone or your internet bill. And many states stack their own discount right on top of that which can push it higher. And separately, if heating or cooling your home is ever a strain on the budget, there is a program that goes by the letters LIHEAP, the Low-Income Home Energy Assistance Program, and it helps pay that utility bill directly. Now, I will be honest with you. This is not the glamorous one on the list. $9 a month is not going to change your life. But here's how I want you to think about it. It is one more recurring bill that the system already decided people in your situation should not have to carry alone. And it is sitting there unclaimed for the same reason as all the others. You only get it if you ask. When you have a few of these stacked together, the small ones and the big ones, that is when the monthly number really starts to move.
And that brings me to number five, the one I told you to stay all the way to the end for because this is the one that quietly costs people the most year after year. And it is the single easiest one on this entire list to fix. Remember that brand new $6,000 bonus I told you about at the start? Well, on top of that, the tax code gives every filer who is 65 and older an additional standard deduction. This is a second completely separate bump and it has been sitting in the law for years. It stacks right on top of the regular standard deduction that everybody gets and now it also stacks with the new bonus. Put all of it together, the regular standard deduction, the long-standing senior add-on, and the new $6,000 bonus, and what you find is that a very large number of people over 65 owe far less in federal tax than they believe they do, and a meaningful number of them owe nothing at all.
But here's the trap, and it is a quiet one. Those same people keep overwithholding from their pension or their Social Security out of habit, or they keep handing their taxes to someone who never stops to adjust for their age. And so they hand the government an interest-free loan every year and call it normal. In my reading of it, this is the most common and the most fixable money mistake that people over 65 make. What I think most people do not understand is that the tax code is not trying to hide this from you out of malice. It is just that no part of the system is set up to walk over and tell you. The easiest move you can make is this. When your return is prepared this year, confirm that both your regular standard deduction and your age 65 additional deduction were applied and then ask whether your withholding should be adjusted going forward so you stop overpaying every month. It is not a battle. It is a box that simply has to be checked correctly.
Now, if you do have some real assets, let me give you a few bonus moves that almost nobody ever hears about because for the right person, these are worth more than everything else on this list combined. The first is a property tax deferral. In a number of states, once you reach a certain age, you can choose to stop paying the property tax bill entirely, and the state simply settles up later when the home is eventually sold or passed on to your heirs. You keep your cash flow.
Now, the second is the surviving spouse carryover. When one spouse passes away, the senior exemptions and the freeze do not automatically transfer in many places and families lose them by accident. But if you file the right paperwork, the surviving spouse can often keep that deceased spouse's exemption alive instead of watching the tax bill jump in the worst possible year.
And the third is one people laugh at until they add it up. In a number of states, once you hit a certain age, your vehicle registration or your annual excise fees get reduced or waived entirely. It is small every year, but it is your money and it is sitting there.
So, let me bring all of this back to where we started with a real person. I once worked with a woman I will call Margaret. She was 72 years old up near Toledo, a widow living in a paid-off home that had quietly doubled in value over the years, getting by mostly on her Social Security and a small pension. And when we sat down and looked at her situation, here is what we found. She was paying the full Medicare Part B premium every month. She was paying the full unfrozen property tax bill on a home that had appreciated for years, and she was paying more in federal tax than she actually owed because her preparer had never applied her senior deductions or adjusted her withholding. All three of those at the same time. And every single one of them was something she had the legal right to stop.
So, we filed three forms: a Medicare Savings Program application, the senior exemption and freeze with her county, and a corrected return. Nothing about Margaret's life changed. She did not move. She did not sell anything. The only thing that changed was how much of her own money stayed in her account at the end of every month. And here's the part I want you to really hear. She was not gaming the system. She was not getting away with anything. She was simply finally claiming what she had already earned over a lifetime of doing everything right. That is the entire point of what I am telling you today. Being legally exempt and actually keeping the money are two different things. And the only bridge between them is the form. The agencies are not going to build that bridge for you.
So, here is exactly what I want you to do this week, and none of it costs you a dollar. First, call your county assessor's office and ask them by name whether the homestead exemption, the senior exemption, and the assessment freeze are on file for your property. If any of them are not, ask which form adds them and what the deadline is. Next, call your local SHIP office and ask them to screen you for a Medicare Savings Program. And finally, the next time your tax return is prepared, confirm that your senior deductions were applied and ask whether your withholding should be adjusted.
And if the cost of paying someone is part of why you have been putting all of this off, listen closely because you do not have to pay anyone. There are two free programs staffed by trained IRS-certified volunteers. One is called Tax Counseling for the Elderly and the other is AARP Tax-Aid. They will sit down with you and file your return for free and they know exactly which senior deductions to look for. So for most of you, the cost of finally catching every one of these is nothing at all. That is it. A few phone calls and a couple of forms standing between you and money that has been yours all along.
If this one caught you off guard, there is another video right here on the channel where I walk through those property tax forms in much more detail, state by state. It is the same kind of money hiding in the same kind of silence and the card for it is on screen right now.
One last quick thing, and it matters. This is general education, not personal, legal, or tax advice. And these rules really do vary by state and by income. So always confirm your own situation with your county, your state SHIP office, or a qualified professional before you act. And if anything in here helped you, do one thing for me in return. Send this to one person you know who is over 65. It will not cost you a thing, and it just might put a few hundred a month back in their pocket. I will see you in the next.