Written by Alex Bartee
On July 4th, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA), which has been deemed by many to be one of the “largest tax cuts in American history”. This bill includes many provisions which will have a significant tax effect on many individuals and businesses beginning in the 2025 tax year (H.R.1 – One Big Beautiful Bill Act). In this article, we will be discussing Section 70103 of the bill, which covers the new additional deduction for seniors.
Per Section 70103 of the bill, beginning in 2025 and lasting through 2028, an additional deduction of $6,000 will be allowed for each taxpayer who has reached age 65 before the end of the tax year to be filed. This new deduction will be allowed in addition to the current additional standard deduction for seniors that existed prior to the OBBBA (Source: FS-2025-03). However, unlike the additional standard deduction, this new deduction will be available to all qualifying seniors, regardless of whether you are using the standard deduction or itemizing your deductions (Source: FS-2025-03).
Some other specifics on the new deduction include:
- Returns claiming this new deduction must report valid Social Security numbers of each person claiming the senior deduction, per IRS guidance (Source: FS-2025-03).
- Married taxpayers must file jointly to claim the deduction (Source: FS-2025-03).
- The additional $6,000 deduction ($12,000 if married filing jointly (MFJ) and both, the taxpayer and spouse, are age 65 or older) will begin to phase out once your modified adjusted gross income (MAGI) exceeds $75,000 ($150,000 if MFJ). The deduction will be completely phased out once your MAGI reaches $175,000 ($250,000 if MFJ) (Source: H.R.1. – One Big Beautiful Bill Act).
- For purposes of this provision, your modified adjusted gross income includes the adjusted gross income of the taxpayer increased by certain items excluded from gross income (Source: H.R.1. – One Big Beautiful Bill Act). Those items added back to gross income include foreign earned income and housing costs (26 U.S.C. § 911), and income earned as a bona-fide resident of certain US territories (26 U.S.C. § 931, 26 U.S.C. § 933).
Staying informed on this provision and others included in the OBBBA and elsewhere is essential in ensuring full compliance with the current regulations and maximizing your tax benefits. Thank you for placing your trust in us, and please do not hesitate to contact us if you have any questions.
References
- (Source: H.R.1 – One Big Beautiful Bill Act) - https://www.congress.gov/bill/119th-congress/house-bill/1/text
- (Source: FS-2025-03) - https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors
- (Source: 26 U.S.C. § 911) - https://uscode.house.gov/view.xhtml?req=%28u.s.c.%29+AND+%28%28title%3A%2826%29+AND+section%3A%28911%29%29%29&f=treesort&fq=true&num=0&hl=true&edition=prelim&granuleId=USC-prelim-title26-section911
- (Source: 26 U.S.C. § 931) - https://uscode.house.gov/view.xhtml?req=%28u.s.c.%29+AND+%28%28title%3A%2826%29+AND+section%3A%28931%29%29%29&f=treesort&fq=true&num=0&hl=true&edition=prelim&granuleId=USC-prelim-title26-section931
- (Source: 26 U.S.C. § 933) - https://uscode.house.gov/view.xhtml?req=%28u.s.c.%29+AND+%28%28title%3A%2826%29+AND+section%3A%28933%29%29%29&f=treesort&fq=true&num=0&hl=true&edition=prelim&granuleId=USC-prelim-title26-section933