Overview
- The OBBBA created a temporary $6,000 annual deduction for taxpayers age 65+ from 2025 through 2028, available whether claiming the standard deduction or itemizing and not available to married-filing-separately filers.
- Full eligibility applies up to $75,000 MAGI for singles and $150,000 for joint filers, phasing out at a 6% rate until the deduction ends at $175,000 and $250,000 respectively.
- For 2025, the standard deduction rises to $15,750 (single) and $31,500 (joint), and with the existing elderly add-on, many seniors could see no federal income tax on roughly the first $23,750 (single) or $46,700 (joint).
- SSA-1099/1042S forms for 2025 benefits go online Dec. 25, with mailings starting Dec. 26 and delivery expected by the end of January, guiding what beneficiaries report to the IRS.
- Advisers urge year-end moves such as qualified charitable distributions, selective Roth conversions, and withholding adjustments, noting some may get refunds from midyear law changes while others face higher taxable income from Fairness Act lump-sum benefits.