New Tax Deduction Available for Seniors Starting in 2025

New Tax Deduction Available for Seniors Starting in 2025

July 14, 2025 

The One Big Beautiful Bill Act (OBBBA) introduces a generous new tax benefit for older Americans: an enhanced deduction specifically for seniors. Beginning in the 2025 tax year, individuals who are age 65 or older by the end of the year can claim an additional $6,000 deduction – or $12,000 if both spouses qualify. This provision is temporary and is scheduled to expire after the 2028 tax year unless extended by future legislation.

This new senior-specific deduction is an above-the-line deduction that reduces adjusted gross income. It is available in addition to the standard deduction or itemized deductions. In 2025, a qualifying senior who claims the standard deduction could deduct over $23,000, while a qualifying couple could deduct more than $46,000. These amounts can significantly reduce – or in some cases, eliminate – taxable income for many retirees.

Eligibility is based on modified adjusted gross income (MAGI), and the deduction phases out as income increases:

• Single filers: The deduction begins to phase out once MAGI exceeds $75,000 and is fully phased out at $175,000.
• Married couples filing jointly: The deduction begins to phase out once MAGI exceeds $150,000 and is fully phased out at $250,000.

Although the OBBBA does not eliminate the taxation of Social Security benefits, this enhanced deduction effectively shields a larger portion of retirement income from tax. For many seniors, especially those without large pensions or investment income, it will feel like a meaningful tax cut.

Seniors near the phaseout thresholds may want to review their retirement income strategy. In some cases, modest tax planning – such as adjusting IRA withdrawals or using qualified charitable distributions – could help preserve access to the full tax deduction.

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