As with most tax law changes, there come rules and restrictions.  I will cover some of the key points of this new deduction:

Starting in 2025 and running through 2028, the OBBBA introduces a new, additional tax deduction for individuals aged 65 and older. This is on top of:

  • The regular standard deduction, and
  • The existing “65 or older” additional standard deduction
  • Or in conjunction with itemized deductions
  • OBBBA Senior Bonus Deduction: Up to $6,000 (single) or $12,000 (joint, 65+)
  • Time Frame: 2025 through 2028
  • Phase-Out:
    • Starts at MAGI > $75,000 (single) / $150,000 (joint)
    • Fully phased out above $175,000 (single) / $250,000 (joint)
  • Stackable with all existing standard-age deductions
  • Available regardless of itemizing or standard deduction
  • Requires valid SSN; not for MFS filers

Phase-Out Rules (Affordability Cap)

This bonus deduction begins to phase out once your Modified Adjusted Gross Income (MAGI) exceeds certain thresholds:

Filing Status  Full Deduction If MAGI ≤             Fully Phased Out If MAGI ≥
Single (or HoH)   $75,000                 $175,000
Married Filing Joint $150,000                 $250,000

The phase-out rate is 6% of the amount over the threshold, meaning a $1,000 excess reduces the deduction by $60.

Eligibility & Stacking Rules

  • Taxpayers must be 65 or older by the end of the tax year.
  • Available whether you take the standard deduction or itemize deductions.
  • Requires a valid Social Security Number (SSN) for the taxpayer (and spouse, if filing jointly).
  • Not available for those using Married Filing Separately.
  • It stacks with both:
    • The regular standard deduction, and
    • The age-and-blindness additional standard deduction ($2,000 for single; $1,600 per spouse when married)

Summary Example (2025 Tax Year)

Let’s say you’re single, 65 or older, with MAGI of $100,000:

  1. Regular standard deduction (2025): $15,750
  2. Extra “age-65+” standard deduction: $2,000
  3. OBBBA additional deduction:
    • MAGI is $25,000 over the $75,000 threshold
    • Reduction: $25,000 × 6% = $1,500
    • Available amount = $6,000 − $1,500 = $4,500
  4. Total deductions = $15,750 + $2,000 + $4,500 = $22,250