The Senior Deduction Under the One Big Beautiful Bill Act

Jaclyn Barkow, DBA, EA, CPA

Tax deductions are generally classified as either “For AGI” (adjusted gross income) or
“From AGI” deductions. With the passage of the One Big Beautiful Bill Act in 2025, new
“From AGI” deductions became available to qualified taxpayers. Importantly, these
deductions do not require itemizing to reduce taxable income. One such deduction, the
Senior Deduction is available for eligible individuals from 2025 through 2028.
Eligibility
The deduction is $6,000 for individuals, up to $12,000 for a married filing joint return. In
order to be eligible, individuals must be over age 65 at year end, have a social security
number and be within the Modified Adjusted Gross Income (MAGI) limits. If married,
taxpayers must file a joint return to qualify for this deduction. Taxpayers are not required
to itemize in order to take the deduction.
Income limitations
The deduction starts to phase out for single taxpayers (reduce by 6% from $6,000)
when MAGI exceeds $75,000 and is fully phased out at MAGI of $175,000. The
deduction starts to phase out for married taxpayers when MAGI exceeds $150,000 and
is fully phased out at MAGI of $250,000. The phase – out is 6% or 6 cents for every $1
MAGI exceeds the minimum threshold.
For example, if a single individual has MAGI of $60,000, the full $6,000 deduction is
available assuming all other requirements are met. If a single individual has MAGI of
$85,000, the taxpayer’s MAGI is $10,000 over the lower threshold by $10,000. The
phaseout would be $600 (10,000 x 6%) leaving a remaining deduction of $5,400.
Planning Ahead
If a taxpayer is eligible for this deduction, be aware of a few potential benefits and
considerations. Less social security may be taxable and this may change the filing
requirement for the taxpayer if they are already close to not having a filing requirement.
Also consider the taxpayer’s state income taxes and whether the state requires this
deduction to be added back for state tax purposes or take the deduction into
consideration for determining state taxable income. Finally, remember this deduction is
temporary and only available through 2028. If this deduction does remove the filing
requirement, it is important to continue to follow each year’s rules to remain compliant
with current laws.