If you will be age 65 or older on December 31, 2025, you have a new opportunity for tax savings. 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.
How Much Can You Deduct?
If you qualify, you may be eligible for a bonus OBBBA senior tax deduction of up to $6,000 per person. For married couples 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 OBBBA senior tax deduction phases out at higher income levels:
- For singles: begins at $75,000 modified adjusted gross income (MAGI); fully phased out at $175,000
- For joint filers: 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
If you want to discuss the new seniors’ deduction, contact us today!