The new “bonus” deduction for older Americans has received a lot of attention since the One Big Beautiful Bill Act was passed on July 4. Here’s what’s changing for seniors with the new bill.
Bonus Deduction
Starting in 2025, the bill provides a $6,000 bonus deduction for filers 65 and up in addition to the standard deduction available to all taxpayers. The new amount will be $7,600, and $8,000 for unmarried/non-surviving spouses. Note: The bonus deduction ends in 2028.
Phase Out
The deduction begins to phase out for individuals with incomes starting at $75,000, or joint filers with an income of $150,000. It phases out completely for individuals earning more than $175,000, and couples earning $250,000.
The “bonus deduction” has caused some confusion about how the deduction works. It’s important to consider working with a tax professional who can show you how the new rule may apply in your specific situation.
If you want more information, please reach out. More information, including some hypothetical examples, will continue to be released, and once I've had a chance to review it, I’ll be happy to pass it along.