If you’re 65 or older, here’s some great tax news. The IRS already provides a special extra standard deduction for seniors that reduces how much of your income you’ll owe taxes on. But now, because of the newly signed “One Big Beautiful Bill Act” (OBBBA), you can deduct even more starting in 2025.
That leaves more of your money in your wallet—and less in the IRS’s pockets.
What’s the standard deduction story?
Every year, the IRS increases the standard deduction and other tax savings to keep pace with inflation. For 2025, before the new law, the standard deduction was already increasing:
- $15,000 for single filers
- $30,000 for married couples filing jointly
- $22,500 for heads of household
And for elderly taxpayers, there’s a further standard deduction:
- $2,000 if single or head of household and 65+
- $3,200 if both a married couple are 65+
These extra deductions lower your taxable income. But now the OBBBA slaps an extra $6,000 bonus deduction on senior citizens.
The $6,000 bonus: How it works
The bonus deduction is in addition to regular and age deductions you are already getting. It’s for people 65 and over with income below:
- $75,000 if single
- $150,000 if married filing jointly
If you’re in one of those income groups, you qualify for the entire bonus. If you earn more than that, the bonus is phased out.
But the twist: this bonus deduction is only temporary. It’s only for 2025 to 2028—so make hay while the sun shines.
What this means for you
Suppose you’re a single filer and 66 years old. Under this new bill, your potential 2025 deductions would be the following:
- $15,750 (usual deduction)
- $2,000 (age 65+ bonus)
- $6,000 (new bonus deduction)
That’s $23,750 in savings—$6,750 more than you would have received prior to this new bill.
If you are married and both you and your spouse are 65 and older, you may have been able to deduct as much as $46,700 from your taxable income in 2025.
Why this matters
Those exclusions aren’t mere numbers on an accountant’s sheet, either – they do lower your tax bill. The more you’re eligible for, the less you’ll pay in taxes. And to many who were living off fixed incomes, every dollar was important.
The bonus deduction may be temporary, but it is an enormous tax break that could allow you to keep more of your retirement savings.
Related articles: What’s the difference between a Form W-2 and a Form 1099-MISC or Form 1099-NEC?
One last thing: Talk to a tax pro
With so much changing—standard deduction increase, bonus deductions, tax bracket changes—it’s probably worth sitting down with a tax pro. They can walk you through precisely how the changes affect your specific situation and what you can do to take advantage of the benefits in the best way.
Trump’s “One Big Beautiful Bill” may be ugly in spots, but to seniors, this additional bonus deduction is straightforward: it’s a WINNER.
