By Andrew K. Venzke, CPA – Tax Supervisor,  and Nick A. Kline – Tax Staff

What Is the Senior Deduction?

Beginning with the 2025 tax year and continuing through 2028, taxpayers who are 65 or older may claim an additional deduction of $6,000 per person. Married couples filing jointly can claim up to $12,000 if both spouses meet the age requirement. This deduction is available regardless of whether the taxpayer itemizes or takes the standard deduction.

Importantly, this new deduction is in addition to the extra standard deduction for taxpayers ages 65 and older. With the new senior deduction, a married couple over 65 that files jointly could deduct $46,700 in 2025 when combining the standard deduction of $31,500, the additional standard deduction of $3,200, and the new senior deduction of $12,000.

Eligibility Requirements

To qualify for the senior deduction:

• You must be age 65 or older by the end of the tax year.
• You must have a valid Social Security number.
• You may not file as Married Filing Separately (if married)

You do not need to be retired or receiving Social Security benefits to qualify.

Income-Based Phase-Outs

The deduction is subject to Modified Adjusted Gross Income (MAGI) limits:

• Single filers: Phase-out begins at $75,000 and ends at $175,000.
• Married filing jointly: Phase-out begins at $150,000 and ends at $250,000.

The deduction is reduced by 6% of the amount that exceeds the MAGI threshold. For example, a single filer with $100,000 in MAGI would exceed the threshold by $25,000 and have the senior deduction reduced by $1,500 ($25,000 x 6%).

Planning Tips for Seniors

Seniors approaching the phase-out thresholds should consider strategies to reduce MAGI, such as delaying income recognition, increasing retirement plan contributions, and timing capital gains strategically.

Married couples should evaluate the benefits of filing jointly versus separately. Filing jointly is required to claim the senior deduction.

Final Thoughts

The Senior Deduction under the OBBBA is a valuable tool for seniors seeking to reduce their tax liability. The benefit is available only through 2028, and it offers a window of opportunity for strategic tax planning. By managing income levels and coordinating deductions, senior entrepreneurs can preserve more of their earnings and strengthen their financial position in retirement.

If you’re 65 or older, now is the time to review your tax strategy.