OBBBA Adds a Possible Senior Tax Deduction (Ages 65 and Older)

Senior Tax Deduction

Will you be age 65 or older on December 31, 2025? If so, here’s some good tax news.

From 2025–2028, the One Big Beautiful Bill Act (OBBBA) allows you—if not phased out—to claim a special bonus deduction of up to $6,000. The deduction is available whether you itemize or not.

If You’re Married

If you and your spouse are both age 65 or older, you may be able to claim two $6,000 bonus deductions, for a combined total of up to $12,000.

But if you file separate returns, no dice—you must file jointly to qualify for the senior bonus deduction.

Phase-Out Rule

Senior Tax Deduction

The OBBBA phases out the new senior bonus deduction when your modified adjusted gross income (MAGI) exceeds $75,000 if you’re unmarried, or $150,000 if you file jointly. The phase-out is complete once MAGI reaches $175,000 or $250,000, respectively.

MAGI is your adjusted gross income (AGI) plus certain types of tax-free offshore income (which most people won’t have).

Example 1. You’re unmarried and will be 65 or older on December 31, 2025. For 2025, you could potentially deduct up to $23,750, combining the OBBBA’s increased standard deduction with the new senior bonus deduction:

• $15,750 standard deduction for a single taxpayer

• $2,000 additional standard deduction for age 65 or older (adjusted annually for inflation, in place since 1987)

• $6,000 senior bonus deduction

That’s $23,750 sheltered from federal income tax. Not bad!

Example 2. You’re married filing jointly, and both spouses are age 65 or older as of December 31, 2025. For 2025, you could potentially deduct up to $46,700, as follows:

• $31,500 standard deduction for married filing jointly

• $3,200—two $1,600 age-based additional standard deductions

• $12,000—two $6,000 senior bonus deductions

That’s $46,700 sheltered from federal income tax. Nice!

Senior Tax Deduction

How to Win

These examples show how seniors can boost deductions by combining the standard deduction with the new bonus deduction.

The strategy is to micromanage your MAGI to maximize the deduction by keeping income under or only slightly above the phase-out threshold. For example:

• Spread out net capital gains over several years by carefully timing gains and losses.

• Spread out taxable income from Roth conversions over multiple years.

• If self-employed, consider expensing assets and increasing retirement contributions to reduce taxable income.

Takeaways

• Starting in 2025, seniors age 65 or older can claim a new bonus deduction of up to $6,000—on top of the standard and age-based deductions—thanks to the OBBBA.

• Married couples filing jointly may qualify for up to $12,000 in bonus deductions, though the benefit phases out at higher income levels.

• Smart planning to manage your MAGI—such as spreading out capital gains or retirement conversions—can help you capture the maximum benefit from this new tax break.