Starting with the next tax year, retirees in the United States will benefit from a significant new tax break under the recently enacted Trump‘s “One Big Beautiful Bill Act”. The Internal Revenue Service will allow individuals aged 65 and older to claim an additional $6,000 deduction on top of the existing senior standard deduction. For married couples where both spouses qualify, that amounts to a combined $12,000 deduction, potentially lowering their federal tax burden by thousands of dollars.
New senior deduction aims to ease retirement burden
This new deduction enhances the long-standing senior standard deduction and is designed to offer greater financial flexibility to older Americans. Notably, it applies regardless of whether taxpayers choose to itemise deductions or take the standard deduction, giving seniors more options when filing their returns.
To qualify, individuals must be 65 or older by the end of the taxable year, possess valid Social Security numbers, and file jointly if married. However, the benefit begins to phase out for higher-income earners. For single filers, the deduction starts phasing out at a modified adjusted gross income of $75,000 and is eliminated entirely at $175,000. For joint filers, the phase-out begins at $150,000 and ends at $250,000.
Benefit applies to standard and itemised filers
The tax break will be in effect from 2025 through 2028, after which it is scheduled to expire unless extended by Congress. In the meantime, it represents one of the most notable changes in tax policy for retirees in recent years. For example, in 2025, a single filer aged 65 or older could deduct up to $23,750 when combining the standard and additional deductions. A married couple both aged 65 or older filing jointly could see a deduction of up to $46,700.
While some initial confusion surrounded whether Social Security benefits would become tax-exempt under the new law, the Social Security Administration has clarified that the new deduction only reduces taxable income; it does not exempt Social Security payments from federal taxes entirely.The measure has been widely welcomed as a much-needed form of relief for older Americans facing rising retirement costs.