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Understanding the One Big Beautiful Bill (OBBB) Act: – New $6,000 Tax Break for Seniors in 2025

August 5, 2025 | Weekly Commentary

The One Big Beautiful Bill (OBBB) Act, signed into law on July 4, 2025, offers a new $6,000 tax deduction for seniors aged 65 and older. Here’s a simple guide to help you prepare for your 2025 taxes.

What’s the New Deduction?

If you’re 65 or older by December 31, 2025, you can claim a $6,000 deduction per person ($12,000 for a married couple if both are 65 or older). This deduction lowers your taxable income and is available whether you:

  • Take the standard deduction ($15,750 for single filers, $31,500 for joint filers, or $23,625 for head of household in 2025, plus $2,000 for single/head of household or $1,600 per spouse for joint filers if 65+).
  •  Itemize deductions (e.g., for medical expenses or charitable donations). 

For example:

  • A single senior with $50,000 income could claim the $6,000 deduction, reducing AGI to $44,000, then take the standard deduction ($17,750 if 65+) to lower taxable income to $26,250.
  •  A married couple, both 65+, could claim $12,000, reducing AGI, then itemize or take the standard deduction ($34,700).

This deduction is available through 2028.

Who Qualifies?

You’re eligible if:

  • You (or your spouse, if filing jointly) are 65 or older.
  • Your income (after adjustments) is $75,000 or less (single) or $150,000 or less (joint filers).
  • If you are above these limits, the deduction shrinks by 6 cents per dollar over the limit and disappears at $175,000 (single) or $250,000 (joint).

Why It Matters

This deduction can lower your taxes, especially for seniors on pensions or Social Security, by reducing your taxable income. It may also reduce taxes on Social Security benefits.