New Senior Tax Benefit

The latest tax law changes affected those age 65 or greater. Here are the requirements to gain up to an extra $6,000 tax deduction:

Who is eligible for the deduction?

To qualify for the deduction, you must be:

  • at least 65 years old by the end of the tax year;
  • have a valid Social Security Number; and
  • have a modified adjusted gross income (MAGI) of less than $175,000.

If you’re married and filing a joint tax return, your spouse can also claim the deduction if:

  • they’re 65 or older; and
  • your combined MAGI is less than $250,000.

If you file Married Filing Separately, you are not eligible for this deduction.

How much is the deduction?

The maximum deduction is $6,000 per eligible taxpayer. For married couples filing jointly, the maximum deduction is $12,000 if both people are age 65 or older.

Are there limitations?

Yes. The deduction is gradually reduced (potentially to $0) if your MAGI exceeds $75,000, or $150,000 for joint filers. At that point, the deduction is reduced by six cents for every dollar over the applicable threshold.

Once your MAGI reaches $175,000 for singles or $250,000 for joint filers, the deduction is fully phased out.

The $6,000 is reduced by 6% of the excess over this amount. This makes the phaseout ranges:

Single: $75,000 to $175,000

Married Filing Joint: $150,000 to $250,000

Example:

Jose and Maria are both 66 years old, file a joint tax return and have $180,000 in modified adjusted gross income. Their new senior exemption will be $10,200. It is reduced by $1,800 [6% x ($180,000 – $150,000)].

Example:

Jose is single and has a MAGI of $100,000. Since his MAGI is $25,000 over the applicable threshold of $75,000 for single taxpayers, the deduction is reduced by 6 percent of that amount, or $1,500. He can claim $4,500 for the new deduction.

Do I need to itemize my deductions?

No. The standard deduction still applies. This $6,000 senior deduction is in addition to your standard deduction.

If you do itemize, this extra deduction also applies.

Thus, the new $6,000 deduction is stacked on top of both the regular standard deduction ($15,750 for single filers or $31,500 for married couples filing jointly in 2025) and the 65-plus addition.

Example:

Madge is a 65-year-old single taxpayer who qualifies for the full $6,000 deduction. She could deduct a total of $23,750 from these tax breaks on their 2025 tax return. ($15,750 + $6,000 + $2,000).

If Madge were married and her spouse was also at least 65, they could claim a total deduction of up to $46,700 ($31,500 + $12,000 + $3,200).

Example:

Madge itemizes her deductions and for 2025 this amount is $50,000. She can also add $6,000 to this amount so long as she qualifies, making her total deduction $56,000.

 Tax Planning Tips

If you’re over 65 any time before January 1, 2026,  and working, know this new deduction and its phaseouts. Consider the following:

  • Work fewer hours if you think you’ll be approaching the phaseout.
  • Know the MAGI (Modified Adjusted Gross Income) requirements.
  • Perhaps adjust your withholdings as this will reduce your income by a maximum of $6,000 per person for the next three years.
  • Social Security benefits are still taxable.

And finally:

AS ALWAYS, CONSULT YOUR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY TAX PLANS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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