New Tax Deduction of Up to $6,000 for Seniors in the 2025 Filing Season
The Big Money Show breaks down new IRS limits for 401(k)s and IRAs, giving savers more room to invest for retirement.
Tax season is fast approaching, and several tax policy changes will affect older Americans as they prepare to file their returns.
The enactment of the Republicans’ One Big Beautiful Bill Act (OBBBA) last year revised numerous tax policies, including provisions that the IRS is implementing for the 2025 tax year. Americans will begin filing their tax returns starting January 26.
One significant change impacting seniors is a bonus deduction for those aged 65 and older, which can be claimed in addition to the standard deduction. This new provision aims to provide additional financial relief to retirees.
“In addition to the existing standard deduction, filers who are age 65 and older can qualify for a new senior bonus deduction of up to $6,000 for individuals and $12,000 for married couples,” stated Nancy LeaMond, AARP’s executive vice president and chief advocacy and engagement officer. “This deduction is targeted to lower- and middle-income retirees and will help tens of millions keep more of their income.”
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Americans age 65 and up will be eligible for an extra deduction starting with the 2025 tax filing year, depending on their income level. (Michael Bocchieri/Getty Images)
“With ongoing anxiety around cost of living and kitchen table budget issues, this kind of relief can make a critical difference for folks trying to make ends meet,” LeaMond added.
The extra deduction for seniors phases out for taxpayers with a modified adjusted gross income (MAGI) exceeding $75,000 for single filers and $150,000 for joint filers. For seniors whose incomes surpass these thresholds, the tax break gradually phases out, reducing the deduction by 6 cents for every dollar over that amount.
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President Donald Trump signed the GOP’s One Big Beautiful Bill Act into law on July 4, 2025. (Samuel Corum/Getty Images)
AARP provided an example of a single 70-year-old with a MAGI of $80,000—$5,000 above the $75,000 phaseout threshold—who would see their deduction reduced by $300, resulting in a total deduction of $5,700.
The new extra deduction for seniors phases out entirely for taxpayers whose MAGI reaches $175,000 or more as individuals or $250,000 or more for joint filers.
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The extra deduction for seniors is scheduled to expire after the 2028 tax year. (Mandel Ngan/AFP via Getty Images / Getty Images)
Senior citizens can claim the new extra deduction regardless of whether they itemize their tax return or opt for the standard deduction.
While the One Big Beautiful Bill Act’s extra deduction for seniors takes effect this year, it is not a permanent provision of the tax code. Under current law, it is scheduled to expire after the 2028 tax year. Congress may take action to extend the policy beyond that year, but it remains uncertain if lawmakers will do so.
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As with other new tax provisions in the OBBBA, lawmakers made the extra deduction for seniors temporary to comply with Congress’ reconciliation rules, which limit how much the legislation can increase budget deficits. Reconciliation allows bills to pass through the Senate without facing the 60-vote filibuster threshold, requiring only a simple majority for passage.
The Big Money Show breaks down new IRS limits for 401(k)s and IRAs, giving savers more room to invest for retirement.
Tax season is fast approaching, and several tax policy changes will affect older Americans as they prepare to file their returns.
The enactment of the Republicans’ One Big Beautiful Bill Act (OBBBA) last year revised numerous tax policies, including provisions that the IRS is implementing for the 2025 tax year. Americans will begin filing their tax returns starting January 26.
One significant change impacting seniors is a bonus deduction for those aged 65 and older, which can be claimed in addition to the standard deduction. This new provision aims to provide additional financial relief to retirees.
“In addition to the existing standard deduction, filers who are age 65 and older can qualify for a new senior bonus deduction of up to $6,000 for individuals and $12,000 for married couples,” stated Nancy LeaMond, AARP’s executive vice president and chief advocacy and engagement officer. “This deduction is targeted to lower- and middle-income retirees and will help tens of millions keep more of their income.”
IRS ANNOUNCES START DATE OF 2026 TAX FILING SEASON: WHAT TO KNOW
Americans age 65 and up will be eligible for an extra deduction starting with the 2025 tax filing year, depending on their income level. (Michael Bocchieri/Getty Images)
“With ongoing anxiety around cost of living and kitchen table budget issues, this kind of relief can make a critical difference for folks trying to make ends meet,” LeaMond added.
The extra deduction for seniors phases out for taxpayers with a modified adjusted gross income (MAGI) exceeding $75,000 for single filers and $150,000 for joint filers. For seniors whose incomes surpass these thresholds, the tax break gradually phases out, reducing the deduction by 6 cents for every dollar over that amount.
IRS REVEALS UPDATED CONTRIBUTION LIMITS FOR 2026
President Donald Trump signed the GOP’s One Big Beautiful Bill Act into law on July 4, 2025. (Samuel Corum/Getty Images)
AARP provided an example of a single 70-year-old with a MAGI of $80,000—$5,000 above the $75,000 phaseout threshold—who would see their deduction reduced by $300, resulting in a total deduction of $5,700.
The new extra deduction for seniors phases out entirely for taxpayers whose MAGI reaches $175,000 or more as individuals or $250,000 or more for joint filers.
SOCIAL SECURITY COLA FOR 2026 REVEALED FOLLOWING SHUTDOWN-RELATED DELAY
The extra deduction for seniors is scheduled to expire after the 2028 tax year. (Mandel Ngan/AFP via Getty Images / Getty Images)
Senior citizens can claim the new extra deduction regardless of whether they itemize their tax return or opt for the standard deduction.
While the One Big Beautiful Bill Act’s extra deduction for seniors takes effect this year, it is not a permanent provision of the tax code. Under current law, it is scheduled to expire after the 2028 tax year. Congress may take action to extend the policy beyond that year, but it remains uncertain if lawmakers will do so.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
As with other new tax provisions in the OBBBA, lawmakers made the extra deduction for seniors temporary to comply with Congress’ reconciliation rules, which limit how much the legislation can increase budget deficits. Reconciliation allows bills to pass through the Senate without facing the 60-vote filibuster threshold, requiring only a simple majority for passage.
