The IRS’s announced inflation adjustments have a permanent impact on certain amounts of credits and deductions for 2025 since they raise tax rates. Additionally, some deductions, including the standard deduction, have changed, particularly the one for the extra standard deduction for individuals 65 and older. This is great news, as 90% of people are known to opt for the standard deduction instead of itemizing their taxes. The additional standard deduction can help further reduce the taxable income and retirement tax burden for a huge number of seniors age 65 and older who are single or married and filing jointly with the IRS.
The IRS has announced how will tax deductions work for those over 65 in 2025
It should go without saying that the higher standard deduction applies to taxpayers over age 65 in 2025. A small increase in this deduction is made whether they are heads of household or single: from $1,950 in 2024 (returns they will file soon, in early 2025) to $2,000 in 2025 (returns they will file in early 2026). The increased deduction per qualifying spouse will rise from $1,550 in 2024 to $1,600 in 2025, but married couples over 65 filing jointly will still benefit modestly.
Additionally, blind people in the same population sector continue to earn double the additional amount, while couples with two members 65 years of age or older will see a $100 rise in their increased standard deduction. Married people who file jointly in 2025 can deduct an additional $3,200 for each qualified spouse. The standard deduction is expected to increase by $400 to $15,000 for single taxpayers, $800 to $30,000 for married couples filing jointly, and $600 to $22,500 for heads of household in 2025.
How can Americans file their IRS taxes for free this year?
Now that tax season has arrived, there are many options to file your taxes for free, particularly if you have a basic tax return or satisfy certain income requirements. While some government services are provided directly, others are sponsored by charitable groups or through alliances with leading tax software providers. An estimated 30 million taxpayers are eligible to use the IRS’s Direct File program, which was extended into 25 states in 2025. These are the free options you can consider to file your taxes this year:
- Direct file: To be eligible, you must be a W-2 worker, receive unemployment insurance or Social Security, or have less than $1,500 in investment income. A valid state ID or passport is also required, as is a Social Security number or Individual Taxpayer Identification Number (ITIN). Those who earned more than $200,000 in 2024 ($160,200 if they worked for more than one job) or who are married and filed separately and earned more than $125,000 are not eligible to file using DirectFile.
- IRS Free File: Is a free online service available to taxpayers who earned $84,000 or less in 2024 on their adjusted gross income. The IRS has partnered with eight top tax preparation websites, such as TaxSlayer and FreeTaxUSA, to offer the program. Depending on your region, filing requirements, age, and income, you can select which company to deal with. In 2024, 70% of Americans qualified for IRS Free File, but less than 5% utilized it, according to the Taxpayer Advocate.
- Free online tax software: With the ability to upload tax papers and prior years’ returns, as well as guided guidance, tax software businesses excel at streamlining the filing process. Although they usually have fewer features and support, many have free levels for straightforward returns. You can report W-2 income, certain interest and dividends, child tax credits, the Earned Income Tax Credit (EITC), and student loan interest deductions using TurboTax’s basic tier. Approximately 37% of filers are eligible to use TurboTax’s basic tier at no cost.
