Overview
- Taxpayers aged 65 and older can claim an extra $6,000 per person in 2025–2028 whether they itemize or take the standard deduction, with the benefit phasing out above $75,000 for singles and $150,000 for joint filers and ending at $175,000 and $250,000, respectively.
- The SALT deduction cap rises to $40,000 for 2025, but it shrinks for higher earners as income moves from $500,000 to $600,000 of AGI, returning to $10,000 at the top of that range.
- Experts recommend bunching deductions rather than spreading them unevenly across years, as itemize‑versus‑standard decisions shift with the bigger SALT cap and an inflation‑indexed standard deduction.
- Starting in 2026, itemizers lose deductibility on the first 0.5% of AGI given to charity, prompting advice to front‑load gifts into 2025, potentially via donor‑advised funds, while non‑itemizers get a new above‑the‑line deduction of $1,000 ($2,000 for joint filers) for eligible public‑charity donations.
- Lower TCJA‑era rates are extended through at least 2028, leading advisers to revisit Roth conversions and withdrawal sequencing, and the new senior deduction could reduce taxes on Social Security benefits depending on a filer’s combined income.