Tax time could be a little less stressful this year for some retirees, thanks to the new senior tax deduction introduced in President Trump's "big, beautiful bill." But it's important to be clear about what this deduction is and isn't.
Here are the four main things you need to understand if you plan to take advantage of this deduction while filing your 2025 taxes.
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1. Who it's for
You can only claim the new senior tax deduction if you were 65 or older at the end of 2025. You must also provide your Social Security number on your tax return and have a modified adjusted gross income (MAGI) of $75,000 or less for an individual or $150,000 or less for a married couple.
Those with MAGIs over these limits may be eligible for a reduced deduction, or they may not be able to claim this new deduction at all. However, they will still be able to claim the senior tax deduction that was in place before the "big, beautiful bill" passed.
2. How much it's worth
The new senior deduction is worth up to $6,000 for an individual or $12,000 for married couples. Married couples must file jointly to claim this deduction.
This is a tax deduction, so it reduces your taxable income for the year. For example, if you're a single adult with a taxable income of $60,000 prior to this deduction, your taxable income after the deduction is applied would be $54,000. This could result in a bigger tax refund for some seniors.
3. How long it will last
The "big, beautiful bill" only created the tax deduction for tax years 2025 to 2028. It's unclear what will happen to it after this. Future legislation could make it permanent or extend it temporarily, or it may be allowed to lapse.
The deduction is something to keep an eye on over the next few years. If the new senior tax deduction is discontinued, you may have to brace yourself for higher taxes in future years.
4. How to claim it
Claiming the "big, beautiful bill's" senior tax deduction is similar to claiming any other tax deduction. If you're using tax filing software, it should ask you questions to determine whether you qualify for it. If you do, it'll apply it automatically.
If you're working with an accountant, they should also be able to verify whether you're eligible by checking your age, income, and marital status. They might be able to give you some idea of how much this might save you on your 2025 taxes as well.
