https://www.youtube.com/watch?v=bEWOwBH1Dwo
A big tax break for seniors
Starting in 2025, Americans aged 65 and older will get a fresh tax break, thanks to President Trump’s new tax law, the One Big Beautiful Bill (OBBB). Between 2025 and 2028, qualifying seniors can claim an additional $6,000 deduction on their taxes. For married couples filing jointly, that figure doubles to $12,000.
Here is a fun fact: this deduction can be used whether you take the standard deduction or itemise, giving seniors extra flexibility in how they file. It’s essentially a bonus cut in taxable income, designed to lighten the financial load for older Americans.
Who qualifies?
To claim the new deduction, you need to be 65 or older by the end of the tax year. Both individuals and married couples qualify, with couples able to claim $6,000 each.
However, not everyone will get the full benefit. The deduction phases out for higher-income seniors. Singles making over $75,000 and couples making over $150,000 will see the benefit shrink, and it disappears completely at $175,000 for singles and $250,000 for couples.
This means the deduction is aimed squarely at middle-income seniors who could use the extra help.
Why It Matters for Social Security Taxes
The deduction does more than just lower your taxable income. It could also reduce the taxes you pay on Social Security benefits.
The IRS uses a formula called “combined income” to decide how much of your Social Security is taxable. This includes your adjusted gross income (AGI), pensions, investment income, and half of your Social Security benefits. By lowering your AGI with the new deduction, you might drop into a lower range — meaning less of your Social Security is taxed.
For some retirees, this could be the difference between paying taxes on 85% of benefits and paying none at all.
How the Deduction Fits With Existing Breaks
This new deduction stacks on top of existing senior tax breaks. Currently, seniors who take the standard deduction already get an extra $2,000 if filing single and $3,200 if filing jointly. Starting in 2025, you’ll get the new $6,000 (or $12,000 for couples) in addition to these amounts.
That means in 2025, the numbers look like this:
- $15,750 standard deduction for singles
- $31,500 for married couples filing jointly
- Add the new deduction: up to $23,750 for singles and $46,700 for couples
This is a significant reduction in taxable income and could save seniors thousands of dollars.
Should You Change Your Tax Strategy?
The OBBB could encourage some seniors to rethink how they file. Since the 2017 Tax Cuts and Jobs Act, fewer Americans itemise their deductions. But now, with new rules and the possibility of stacking deductions, some seniors may benefit from reviewing their options.
For example:
- High medical expenses or large charitable donations may still make itemizing more appealing.
- Seniors close to the phase-out limits may need to plan carefully, perhaps delaying retirement withdrawals or grouping big expenses into one tax year.
The main point: don’t just file the same way you always have — check if this new deduction changes the math.
A Limited-Time Opportunity
There’s one catch: this new senior tax deduction only lasts from 2025 through 2028. After that, it may expire unless Congress extends it.
That makes the next few years especially important for tax planning. Seniors should consider consulting a tax professional to make sure they’re squeezing the most out of this temporary break.
Read this later:
What are Required Minimum Distributions and how are they calculated?
IRS steps up scrutiny of short-term vacation rentals
Good news for taxpayers hit by floods: IRS provides relief
It’s not just social security: IRS checks also going digital on September 30
Key Takeaways
- Extra savings: Seniors 65+ can claim an additional $6,000 deduction ($12,000 for couples) starting in 2025.
- Income limits: Full benefit phases out above $75,000 (singles) and $150,000 (couples).
- Social Security boost: Lower AGI may also reduce how much of your Social Security is taxed.
- Stacked benefits: New deduction adds on top of current senior breaks and the standard deduction.
- Act soon: The provision only lasts until 2028, so careful planning now is key.
