New Senior Deduction Under the BBB Act of 2025

The Bipartisan Budget Bill (BBB) Act of 2025 introduced significant changes to the standard deduction for seniors. Here’s what you need to know to plan your taxes effectively.

New Senior Deduction

A temporary senior deduction of $6,000 per qualified person is available for 2025 through 2028. Key points:

• A qualified person is anyone who turns 65 by the end of the year. For example, individuals turning 65 on January 1, 2026, are considered 65 as of December 31, 2025.

• The deduction is available whether you itemize deductions or claim the standard deduction.

• This new deduction is in addition to the existing extra standard deduction for seniors and the deduction for blindness, which remain unchanged.

Phaseout of the Senior Deduction

The senior deduction is subject to income limits:

• Phaseout begins at a Modified Adjusted Gross Income (MAGI) of $75,000 for single filers or $150,000 for joint filers.

• MAGI includes AGI, plus foreign earned income exclusion, and income from Guam, American Samoa, the Northern Mariana Islands, and Puerto Rico.

• The phaseout rate is 6% of MAGI exceeding the base amount.

• The deduction is fully phased out at $175,000 MAGI for single filers or $250,000 MAGI for joint filers.

2025 Standard Deduction Amounts

The BBB Act made the 2017 TCJA increases permanent and raised the base standard deduction amounts:

Base Standard Deduction:

• Single: $15,750

• Head of Household: $23,625

• Married Filing Jointly: $31,500

Additional Amounts for Seniors (65+) and Blind Individuals:

• Single: $2,000

• Married Filing Jointly: $1,600 per person

Maximum Standard Deduction for Seniors:

• Single: $23,750

• Head of Household: $31,625

• Married Filing Jointly: $46,700

Important Notes

• This deduction does not make Social Security benefits non-taxable.

• About 50% of Social Security recipients do not pay taxes on their benefits, so the deduction primarily benefits those who do.

• The deduction applies to all Americans aged 65 or older, whether or not they receive Social Security.

Bottom Line: If you or someone in your household is 65 or older, the new senior deduction can significantly reduce your taxable income in 2025. Be sure to review your income and deductions, and consult a tax professional to maximize your benefits.