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KEY TAKEAWAYS
- A new deduction created under the ‘One Big Beautiful Bill’ will allow senior taxpayers to subtract between $6,000 and $12,000 from their 2025 taxable income, lowering their overall tax burden.
- Taxpayers must be 65 years or older, and single taxpayers must have an income of less than $175,000, while married couples must have an income of less than $250,000, to be eligible for the deduction.
A new tax deduction could lower your tax bill this year. Here’s what you need to know about it.
The ‘One Big Beautiful Bill,’ passed in July 2025, created a new deduction for taxpayers aged 65 and older. This new senior deduction, which has also been called a Social Security tax break by the Trump administration, retroactively applies to the entire 2025 tax year, meaning you can claim the deduction when you file your taxes in the next few months.
Individual taxpayers will be able to deduct $6,000 from their 2025 taxable income, or $12,000 for a married couple who both qualify. This is in addition to the standard deduction that all non-itemizing taxpayers can take, and the pre-existing additional standard deduction amount for older taxpayers, which allows single taxpayers to deduct $2,000 and married couples to take $1,600.
Why This Matters
Senior Americans generally have a fixed income that relies on Social Security benefits and possibly retirement savings. Lowering the taxable income for many seniors frees up money that can be used to cover living expenses and discretionary spending.
How to take the deduction:
Some online tax software will automatically apply the new senior deduction if the taxpayers qualify. If an individual files a paper return themselves, they will need to check a box indicating they are 65 years or older on their Form 1040 or Form 1040-SR. The IRS will then automatically apply the deduction, assuming they’re eligibile.
Who is eligible:
- The deduction begins to phase out for taxpayers with a modified adjusted gross income above $75,000, or more than $150,000 for married couples filing jointly. It completely disappears for single taxpayers with an income exceeding $175,000 and for married couples with an income exceeding $250,000.
- The taxpayer must have turned 65 years of age or older sometime in 2025.
- Taxpayers who file both itemized and non-itemized returns are eligible.
- The taxpayer must have a Social Security number.
- If married, the taxpayers must file jointly to be eligible.
