We have written drastically over the tax changes coming this year. Just about every one of our clients can take advantage of at least one of them. Those of you who are 65 and older should be aware of the added Senior Bonus Deduction.

1. What is The Senior Bonus Deduction?

The One Big Beautiful Bill (OBBBA) came with many features. This includes a new federal tax deduction made just for older taxpayers. Taxpayers filing as individuals age 65 may be able to claim an additional $6,000 deduction on their federal tax return. This is in addition to the existing standard deduction available to all tax payers – including seniors. The Senior Bonus Deduction applies to each taxpayer. As a result, married couples could qualify for a deduction of up to $12,000 if both spouses meet the age and other requirements.

Did you know? The average senior aged 60 to 69 pay anywhere from $915 to $15,267 every year in federal taxes? The average amount paid was $5,015. Source: Social Security Administration

2. Are Their Limits to the Senior Bonus Deduction?

Yes, these benefits are income tested. The limits are below.

  • Single filers are eligible if they make a modified adjusted gross income of less than $75,000 per year.
  • Married couples filing jointly are eligible if they make a modified adjusted gross income of less than $75,000 per year.
  • The maximum available deduction for both is also dependent on your income.

Additionally, this benefit is currently set to run through tax years 2025 to 2028 and are then set to expire.

3. Do I Have to File Taxes to Receive the Senior Bonus Deduction?

We know many seniors do not have to file taxes each year. For example, individuals who make less than $17,750 per year do not have to file. This number changes for married couples and heads of household. However, you must file taxes in order to receive this and most other deductions. The good news is many can qualify for these tax deductions. It may be worth your time to file, even if you haven’t done so in years.

The average tax refund for filers aged 65 and over was $3,573 in the year 2022. Source: The Motley Fool

4. How Do I Claim the Senior Bonus Deduction?

Once you file your taxes, you will need to fill out Schedule 1-A. This new form was created to file for all credits and deductions available under the OBBBA. This includes items such as qualified tips, overtime, and taxes on car loan interest. You will find the Enhanced Deduction for Seniors under Part V of this form.

More on The Senior Bonus Deduction in Houston

Do you want to make sure you are collecting the max Senior Bonus and other deductions available to you? Or do you just want to make sense of it all? Contact us if you live in the area and need a professional to prepare your tax return.