Let’s be honest—retirement should feel like a reward, not a burden. But for many people over 65 in the U.S., rising prices and taxes are making it harder to stretch every dollar. Groceries, housing, and healthcare are all getting more expensive. This year alone, rent is up 4.4%, food prices have jumped 2.5%, and healthcare costs are up almost 3%. If you’re living on a fixed income, that adds up fast.
On top of that, nearly half of all Social Security recipients now pay federal income tax on their benefits — a sharp increase from just 10% back in the 1980s. Why? Because the tax thresholds haven’t been updated in over 40 years, even though inflation has marched steadily upward.
A new bill could make taxes easier for people over 65
Enter the Bonus Tax Relief for America’s Seniors Act — a new bipartisan bill that could bring much-needed tax relief to older Americans. If passed, this bill would more than double the extra standard deduction for people 65 and older.
Let’s break that down: If you’re single and over 65, you currently get an additional $2,000 added to your standard deduction. If you’re married and filing jointly, it’s $1,600 per person—$3,200 total. Under this new proposal, single filers would get $5,000, and married couples would get $10,000. That’s a big difference — and it could lower your taxable income enough to reduce or eliminate federal taxes on your Social Security benefits.
Who’s behind the bill — and why it matters
The bill is backed by both Republicans and Democrats in the House, including Reps. Nicole Malliotakis (R-NY), Mike Carey (R-OH), and Jimmy Panetta (D-CA). The AARP has also voiced strong support, calling the bill a “commonsense adjustment” that recognizes how hard it is for older Americans to stay financially secure.
Rep. Malliotakis said the idea actually came from her dad, who asked why retirees are still paying taxes on benefits they worked their whole lives to earn.
There’s more: Other proposals add even bigger breaks
It doesn’t stop there. The House GOP’s larger tax plan—part of Trump’s so-called “One Big Beautiful Bill”—includes ”a temporary $4,000 bonus deduction for seniors through 2028. And now, the Senate has added its own version: a $6,000 bonus deduction for people over 65.
These proposals would apply to individuals with adjusted gross incomes up to $75,000 (or $150,000 for married couples). While nothing is final yet, the momentum is building.
Could this mean the end of Taxes on Social Security?
Some lawmakers are even floating the idea of ending taxes on Social Security benefits altogether — something Trump campaigned on. But don’t hold your breath just yet. Eliminating Social Security taxes would require a full legislative vote, not just a budget tweak. And getting 60 votes in the Senate won’t be easy.
Still, even if that doesn’t happen, the bonus deduction alone could save many retirees more than $2,000 a year in taxes.
Bottom line: Relief is on the horizon
If you’re over 65 and feeling the squeeze, this could be some of the best financial news in years. While Congress still needs to pass the bill, lawmakers on both sides agree — older Americans deserve to keep more of their money. Let’s hope they make it happen.
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