New retirees with a fixed income should always take advantage of every tax break that comes their way. However, most seniors and retirees often fail to capitalize on tax-saving opportunities available. In most cases, it is simply because they do not have relevant information. Do not let that be your case. Look at these most overlooked tax breaks for retirees and seniors to enjoy return free tax filing. They could help you save a bundle:

1. Give money to charity
There is always a way for people above 70 years to make a tax-friendly charitable donation even without itemizing. The qualified charitable distribution (QCD) allows you to transfer up to $100,000 annually from your IRAs directly to a great course. Married couples can also have this opportunity as spouses are permitted to transfer an additional $100,000 to charity from their IRAs. These transfers are not included in the taxable income as they count towards the required minimum distribution. However, you cannot claim the tax-free transfers as a charitable deduction on Schedule A if you opt to itemize.

2. Spouse IRA contributions
You must have an income to contribute to your IRA. However, if you have a working spouse, they can contribute up to $7,000 annually to your IRA. This tax-free saving remains an option as long as your spouse has earned enough income to contribute to your IRA.

3. Deduct Medicare premiums
You can always deduct your Medicare premiums and costs of other supplemental Medicare policies or advantage plans after leaving your job to become self-employed. This tax-saving opportunity is always available, whether you itemize or not. However, you cannot claim the deduction if you qualify for employer-subsidized health plan cover (by your employer or your spouse’s employer).

5. Bigger standard deduction
All taxpayers can choose to take the standard deduction or itemize their personal deductions on Internal Revenue Service schedule A. If your personal deductions are less than the applicable standard deduction, it is advisable to take the standard deduction. Everyone above 65 years is eligible for a higher standard deduction. Additionally, you can always claim a higher standard deduction if your spouse is above 65 and if you file your returns jointly.

6. Avoid the pension payout trap
The general rule states that it is up to you to decide whether your taxes are withheld from payments from annuities, pensions, IRAs, or other retirement packages. However, there is always an exception to this rule. For instance, you can always find yourself in the pension-payout trap if you get a lump-sum payment or any other rollover distribution from a company plan. If you receive such distributions, the company should withhold 20% for the IRS whether you plan to roll over the money into your IRA or not. Additionally, the IRS will hold onto the 20% until you file a tax return for the tax year and request a refund regardless of whether you complete the rollover within the required 60 days. However, there is an escape route for you in this situation. All you have to do is ask your employer to send the money directly to a rollover IRA. There will be no withholding if the check is made out to your IRA and not your personal accounts.

If you are a senior or retiree, it is important to understand and take advantage of all tax deductions available to reduce your income tax every year. If you do not know how, this article should give you a hint. Also, you can check with tax consultants in your area to get more information.