Is There an Extra Deduction for Over 65 in 2021?

Many people are unsure if there will be an additional deduction in 2021 for those who are over 65. Sadly, the response is no. People over 65 are not eligible for any further deductions under the tax code. Seniors can, however, take advantage of a few tax advantages that can lower their tax obligations.

The Retirement Savings Contribution Credit is one such tax credit. People over 50 who make contributions to retirement accounts like 401(k)s or IRAs are eligible for this benefit. Up to a maximum of $2,000, the credit ranges from 10% to 50% of the amount given. Based on the taxpayer’s income and filing status, the credit is determined.

The Earned Income Tax advantage (EITC) is another tax advantage accessible to seniors. Low- to moderate-income taxpayers with earned income, including seniors, are eligible for this benefit. For parents who have three or more eligible children, the credit might be worth up to $6,660.

Let’s now address the relevant query, “Which state has the highest income tax?” California is the solution. With a top rate of 13.3%, California has the highest state income tax in the nation. In addition to New Jersey, Hawaii, Oregon, and Minnesota also have high income tax rates.

As an alternative, some states do not impose a state income tax. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming are some of these states. However, keep in mind that certain states could impose additional taxes on citizens, such sales tax or property tax.

What about Vermont, does it accept tax returns? Yes, tax returns are still being accepted in Vermont. State tax returns can be submitted electronically or by mail by taxpayers. They can also send checks or money orders as payment.

Finally, has Vermont extended the deadline for reporting taxes? Yes, in order to coincide with the IRS deadline extension, Vermont has extended the tax filing deadline for the 2020 tax year to May 17, 2021. The extension gives taxpayers an extra month to file their state tax forms and send in any required payments. Taxpayers who require additional time to file may do so until October 15, 2021, but they must still settle any outstanding payments by May 17, 2021.

In conclusion, there won’t be an additional deduction for people over 65 in 2021, but there will be some tax credits that can help lower your tax bill. While many states don’t have a state income tax, California has the highest state income tax rate. In order to coincide with the IRS deadline extension, Vermont is presently accepting tax returns and has extended the tax filing due to May 17, 2021.