Increased Tax Relief for Retirees (2025–2028)
The One Big Beautiful Bill Act introduces an additional $6,000 tax deduction for individuals aged 65 and older, effective for tax years 2025 through 2028. Married couples where both spouses qualify can claim up to $12,000 total.
Please note, you do not need to be collecting social security or be retired to be eligible for this deduction.
Phase-out Limits Based on Income
This deduction begins to phase out once modified adjusted gross income (MAGI) exceeds:
- $75,000 for single filers (and heads of household),
- $150,000 for married couples filing jointly.
How It Works with Other Deductions
This deduction can be claimed alongside the additional standard deduction already available to seniors.
Why This Matters & What to Watch
- Temporary, but Substantial Relief
While this additional deduction delivers meaningful savings now, it’s important to note that it is temporary—set to expire after 2028. Planning ahead is essential to maximize benefits while they last. - Income Eligibility Is Key
Middle- and lower-income retirees benefit most. If your MAGI exceeds the phase-out threshold, the deduction begins phasing out—and could disappear for higher-income retirees. The deduction can be used to offset all income sources, not just Social Security income. - Tax Strategy Implications
For many retirees, this offers a chance to reduce taxable income significantly. It may influence decisions around itemizing, Roth conversions, or timing of income recognition.
The tax changes and impacts in the One Big Beautiful Bill Act are vast and complex. If you’d like help navigating these updates, please call us at (401) 921-2000 or contact us here.