Federal income tax laws are intended to benefit various groups of taxpayers according to their needs. For people who have reached 65 years of age, the benefits include a reduction of the effective overall tax rate, tax relief of a gain from the same of a personal residence, and for certain taxpayers, an exemption on earned retirement income.

The reduction in the effective overall tax rate results from an additional personal exemption or an additional standard deduction for individuals age 65 or older. The net effect of such additional allowance is to reduce the amount of income taxed by the government, thereby decreasing the amount of tax paid. Such additional standard deduction is not available to people who itemize their deductions.

Relief from tax on retirement income is available to taxpayers who have limited retirement incomes and do not qualify for substantial Social Security benefits. This provision used to be known as Retirement Income Credit; but now is called Credit for the Elderly.

You may be able to use simpler tax forms for filing, such as form 1040-EZ or 1040A, if you do not claim the benefits from retirement income or the sales of a residence and you do not itemize deductions or make adjustments for business expenses. In order to use these simpler forms, all of your income must generally come from salaries and wages, dividends and interest. The Internal Revenue Service will compute your tax for you if your income is less than a specified amount and you are claiming only the standard deduction.

Interested taxpayers should refer to the IRS pamphlet entitled, "Tax Benefits for Older Americans," available free at any IRS office. For additional information regarding federal and state income taxes, contact either your local Internal Revenue Service or the Missouri Department of Revenue.