Good news for seniors: significant tax savings may be coming your way.
The “One Big Beautiful Bill” includes substantial tax relief specifically designed for Americans aged 65 and older. If passed by Congress, starting with your 2025 tax return, eligible seniors will see their standard deduction increased by $4,000 per person—nearly doubling the current extra deduction of $2,000.
Here’s what this means for you: If you’re single and 65 or older with an income under $75,000, you’ll qualify for this enhanced deduction. For married couples where both spouses are 65+, the benefit doubles to $8,000, provided your combined income stays below $150,000.
Real savings for real people. A senior in the 12% tax bracket could save approximately $480 annually with this new deduction. For many seniors living on fixed incomes, this could significantly reduce or even eliminate federal income taxes on Social Security benefits, even though the bill doesn’t remove Social Security taxation entirely.
Important details to remember: This enhanced deduction is temporary, running from 2025 through 2028. The benefit phases out for incomes above the specified thresholds, so those with higher incomes may receive reduced benefits or none at all.
The bottom line: While this bill doesn’t fulfill the promise to eliminate taxes on Social Security benefits completely, it provides meaningful relief where it’s needed most—for low- and middle-income seniors. The larger deduction effectively accomplishes similar goals by reducing overall tax burden.
If you’re approaching 65 or already there, consider consulting with a tax professional to understand how these changes might affect your specific situation and whether any tax planning adjustments would be beneficial as these provisions take effect.
Note: These provisions still require final approval and implementation and may be subject to change before final passage.