For taxpayers who will be age 65 or older on December 31, 2025, there is a new opportunity for tax savings.
The One Big Beautiful Bill Act (OBBBA) created a new bonus tax deduction—available for seniors beginning this year (2025). This deduction can be claimed regardless if the taxpayer itemizes.
The taxpayer may be eligible for a bonus deduction of up to $6,000 per person. For married couples filing jointly—where both spouses are age 65 or older—the total potential deduction is $12,000.
If married, a joint return must be filed to benefit even when only one spouse qualifies.
This bonus deduction is in addition to
- the regular standard deduction, and
- the existing age-based additional deduction
The deduction phases out at higher income levels:
- For singles: begins at $75,000 modified adjusted gross income (MAGI); fully phased out at $175,000
- For joint filers: begins at $150,000; fully phased out at $250,000
MAGI includes AGI plus certain rarely seen tax-free foreign income.
To maximize this deduction, consider strategies to keep MAGI below (or not far above) the phaseout thresholds:
- Spread capital gains over multiple years
- Break up Roth IRA conversions over time
- Make additional business deductions or retirement plan contributions
Killingsworth Spencer is here to help our clients fully understand their options to save taxes today and in the future. We have CPAs, Enrolled Agents, Bookkeepers, and payroll specialists on staff to help our clients with accounting and tax-related matters. For more information or to schedule an appointment, please call us at 770-552-8286. Visit us at www.killingsworthspencerllc.com
- Disclaimer: This post is for general information only and should not be taken as legal or financial advice.