If you are aged 65 or over, there is a new tax deduction that can save you money. The tax preparation professionals at Moskowitz, LLP will claim this deduction for you if you qualify.
The One Big Beautiful Act instituted several new deductions aimed at helping individual classes of taxpayers. In addition to the “No Tax on Tips” rule and deductions for overtime pay, seniors over the age of 65 can now take an enhanced deduction on their tax returns. This deduction applies to all seniors over the age of 65, regardless of your employment status, even if you are still working, you can still benefit from the enhanced deduction.
Find out if you qualify for the enhanced senior deduction and how to claim it on your return by scheduling an appointment with a tax preparation professional by calling us at (888) TAX-DEAL (829-3325) at Moskowitz, LLP. Our tax preparation professionals can explain how this deduction works, along with all of the other recent tax changes that can affect you.
How Much Is the Enhanced Senior Deduction?
The amount of the enhanced tax deduction is as follows:
- $6,000 for individual taxpayers
- $12,000 for married couples (Both spouses must be 65 or older for the married couple to qualify for the full deduction. If only one spouse is that age, only $6,000 can be taken as a deduction.)
The enhanced deduction began with the 2025 tax year, even though OBBA was not signed into law until midway through the calendar year. It is scheduled to expire at the end of 2028, unless Congress takes action to extend the enhanced deduction. In the meantime, you can continue to take the enhanced deduction for each year up to that point, as it is on a per-year basis.
How Does the Enhanced Senior Tax Deduction Work?
You will need to include Schedule 1-A with your tax return. Here, you will calculate how much of the enhanced deduction you are able to take. If you earn more than the lower end of the phase-out amount, you will need to perform a calculation that shows how much of the enhanced amount you are still qualified to deduct.
Like many other tax deductions, the one that applies to seniors begins to phase out at certain income levels. For a single taxpayer, the enhanced deduction begins to phase out at $75,000 of adjusted gross income. The phase-out level is $150,000 for joint filers. You lose $100 of the deduction for every $1,000 that your income exceeds that level. Thus, high-income taxpayers may not be able to claim the enhanced deduction.
The tax deduction is a special one that you can take as a senior. The enhanced deduction does not replace the standard deduction that every taxpayer is allowed to take. Additionally, since this is structured in the form of a deduction, you cannot take it if you itemize your deductions on your return. As such, if you are still paying mortgage interest on your home, and you pay state taxes, you may still find it more advantageous to itemize and forgo the enhanced deduction. The same thing goes if you pay a large amount of your income as medical expenses because you can take a below-the-line deduction on those when they exceed 7.5% of your adjusted gross income.
Strategies to Maximize the Benefits of Your Enhanced Deduction
You can avail yourself of strategies to maximize the benefits of this deduction. For example, you may have a traditional IRA on which you will need to pay taxes when you draw money from it. You can convert from a traditional IRA to a Roth account (on which you have already paid taxes) in the amount of the enhanced deduction, so you can avoid paying taxes on the amount of the conversion. You can also lock in some capital gains and offset them through the enhanced deduction. However, you must be conscious of the amount of IRA that you convert or capital gains that you take because you may take your income above the phaseout threshold, since you will then begin to lose the enhanced deduction.
Contact a Tax Preparation Professional
Claim every dollar that to which you are entitled on your tax return by working with an experienced tax professional at Moskowitz, LLP. We are on top of all of the tax laws and can help you obtain the best tax outcome this season. Schedule an appointment with a tax preparation professional by visiting our website or by calling us today at (888) TAX-DEAL (829-3325).
