Seniors: A Tax Tip That May Save You Big!

ByJim Schuster

Here’s a little tax tip that might save you big.

First off most seniors do not itemize but use the “standard deductions” instead.  For 2025 the amount is $17,000 for a single senior.   Are you experiencing unusually high bills due to a medical condition this year?  Maybe you should itemize and use the “medical expenses”  deductions this year instead of taking the “standard deduction.” Deductible medical expenses include:

  • Medicare Part B monthly premiums.
  • Medicare Part C (Medicare Advantage/MA) premiums.
  • Medicare Part D (prescription drug plan) premiums and copays
  • Constructing entrance or exit ramps for your home.
  • Widening doorways at entrances or exits to your home.
  • Widening or otherwise modifying hallways and interior doorways.
  • Installing railings, support bars, or other modifications to bathrooms.
  • Lowering or modifying kitchen cabinets and equipment.
  • Moving or modifying electrical outlets and fixtures.
  • Installing porch lifts and other forms of lifts (but elevators generally add value to the house).
  • Modifying fire alarms, smoke detectors, and other warning systems.
  • Modifying stairways.
  • Adding handrails or grab bars anywhere (whether or not in bathrooms).
  • Modifying hardware on doors.
  • Modifying areas in front of entrance and exit doorways.
  • Grading the ground to provide access to the residence.
  • In addition the following are also deductible medial expenses:

The above comes from IRS Publication 502.

Necessary note: you can only deduct the amount over 7.5% of your “adjusted gross income.  That means it is especially important to get a receipt for each payment. Get your doctor’s recommendations in writing.

Now for the tax tip. Many seniors have very high medical expenses in one year or another. And many seniors have IRAs or 401ks.  What that means is that your unusually high medical expenses may allow you to withdraw money from your IRA or 401k tax free.

So incurring a period of huge payouts of medical expenses? Check with a knowledgeable tax professional   And if  it looks like you’ll be able to get some money out of your IRA/401k tax free, go for it!

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