New $6,000 tax deduction for seniors

What is the tax deduction for seniors over 65?

The new senior tax deduction, sometimes called ‘No Tax on Social Security’, is up to $6,000 for single filers and $12,000 for joint filers, and was created to potentially eliminate taxes on Social Security benefits. It’s available to all eligible seniors, even if you don’t have Social Security income.

It’s important to note that the new senior tax deduction is temporary. You can take the new senior deduction starting in 2025 through tax year 2028.  

How the new senior tax deduction works

The new tax deduction for seniors 65 and older allows you to reduce your taxable income by up to $6,000. Taking the new senior deduction can mean less tax or potentially an even bigger tax refund when you file your return.

You can take the new deduction in addition to the other tax benefits for seniors, including the additional standard deduction.

This new deduction is available for all eligible taxpayers who are 65 and older, and you can take it regardless of whether you choose to take the standard deduction or itemize your deductions.

Who qualifies for the new $6,000 senior tax deduction? 

You must be 65 or older by the end of the tax year to qualify for the new senior tax deduction, include your Social Security number on your tax return, and meet the income limits.

It’s also important to note that if you’re married, you must file jointly to qualify. The new senior tax deduction is not available for taxpayers who are married filing separately.

The MAGI (modified adjusted gross income) limit is $75,000 ($150,000 for joint filers). If you make less than the limit, you may qualify for the full $6,000 deduction. The deduction starts phasing out by 6 cents for every dollar you’re over the limit.

Here’s an example:

Let’s say you’re a single filer with a MAGI of $80,000, which is $5,000 over the phase-out limit. To calculate your deduction:

First, multiply the amount exceeding the phase-out limit by $0.06.

$5,000 × $0.06 = $300

Then, subtract the reduction from the full deduction amount.

$6,000 - $300 = $5,700

So, with a MAGI of $80,000, your maximum senior deduction would be $5,700 instead of the full $6,000.

Can I itemize and still claim the senior deduction? 

Yes, you can claim the new $6,000 senior tax deduction if you itemize your tax deductions, or if you choose to take the standard deduction. You are not required to take the standard deduction or itemize in order to qualify, and it’s available in addition to all other senior tax benefits, including the additional senior deduction.

Other tax breaks available to seniors 

There are many tax breaks available to seniors 65 and older in addition to the new $6,000 senior deduction. These include:

• Additional standard deduction: If you are single or file as Head of Household, you could deduct up to $2,000 with the additional standard deduction if eligible. Keep in mind that, unlike the new senior tax deduction, you can only take the additional standard deduction if you take the standard deduction, too.
• Credit for the Elderly or the Disabled: This deduction is worth up to $7,500 and is adjusted for pension or annuity payments. It’s available to taxpayers who are 65 and older, as well as taxpayers who are permanently disabled.
• Social Security exclusions: Did you know you may be able to exclude a percentage of your Social Security benefits from your taxable income? Single filers over the age of 65 can exclude 15% with an income of more than $34,000 ($44,000 if married filing jointly), up to 50% with an income between $25,000 and $34,000 ($32,000 and $44,000 if filing jointly), and 100% with an income below $25,000 ($34,000 if filing jointly).
• Qualified Charitable Distribution (QCD): If you are 70½ or older, you can donate up to $108,000 directly from your IRA instead of taking your required minimum distributions. This could lower your taxable income and may prevent you from reaching phase-out limits for other deductions you may qualify for.

New tax changes in 2025 could mean less tax or an even bigger refund for many seniors. Don’t miss out on a single credit, deduction, or dollar you’re owed. File with the Tax Pros who know the tax laws inside and out, including the new changes, and will work hard to get you your biggest tax refund this year and every year. Book your appointment today.