On July 2025, President Donald Trump signed into law the “One Big Beautiful Bill Act” (OBBBA). While this law addresses a multitude of topics, this read will address the Senior Tax Deduction or What sometimes is called the “No Tax on Social Security”. The New Senior Deduction is a temporary tax deduction for individuals age 65 and older and was created to potentially eliminate taxes on social security benefits. This deduction is effective between tax years 2025 – 2028 and may be claimed in addition to the standard deduction (available to all Americans) or itemized deductions.
Individuals eligible for the New Senior Deduction must be 65 years or older by the end of the tax year and have a valid Social Security Number. They may also use any filing status other than ‘Married Filing Separately’. Eligible single filers can claim up to a $6,000 deduction, while married couples filing jointly may claim a maximum deduction of $12,000 (both spouses must be 65 years or older). This $6,000 deduction (per eligible person) is available even if you itemize your deductions and also in addition to the standard deduction. However, there is a phase out range. If your Modified Adjusted Gross Income (MAGI) is between $75,000 - $175,000 (for single filers) or $150,000 - $250,000 (for married filing jointly), the deduction amount that can be claimed will be reduced. Once your income crosses this threshold, the deduction is decreased by 6 cents for every $1 over the threshold amount. As in any tax year, you will want to choose the option with the larger tax benefit. That could be itemizing or claiming the standard deduction. Then the New Senior Tax Deduction would be added to that amount.
If you have any questions about the topics listed above, or if you would like to schedule an appointment, please do not hesitate to contact our team. Appointments can be scheduled online by visiting our homepage at www.ongandcompany.com