OBBBA Adds Possible Senior Tax Deductions

If you will be age 65 or older on December 31st, 2025, you have a new opportunity for savings with tax deductions.

The One Big Beautiful Bill Act (OBBBA) created a new bonus tax deduction—available for seniors beginning this year (2025). You can claim this deduction whether or not you itemize deductions on your tax return.

How Much Can You Deduct?

If you qualify, you may be eligible for a bonus deduction of up to $6,000 per person. For married filing jointly—where both spouses are age 65 or older—the total potential deduction is $12,000.

Important: If married, you must file a joint return to benefit even when only one spouse qualifies; filing separately disqualifies you.

This bonus deduction is in addition to:

• the regular standard deduction, and
• the existing age-based additional deduction.

Income Limits Apply

The deduction phases out at higher income levels:

• For singles, it begins at $75,000 modified adjusted gross income (MAGI)*; fully phased out at $175,000
• For joint filers, it begins at $150,000; fully phased out at $250,000

*MAGI includes AGI plus certain rarely seen tax-free foreign income.

Planning Opportunity

To maximize this deduction, consider strategies to keep MAGI below (or not far above) the phaseout thresholds:

• Spread capital gains over multiple years
• Break up Roth IRA conversions over time
• Make additional business deductions or retirement plan contributions

Next Steps

This new benefit for seniors will certainly save tax dollars for those who meet the criteria. If you have questions, please contact the team at TrueBlaze.