Effective for the 2025 tax year through the 2028 tax year, individuals who are age 65 or older may claim an additional standard deduction of up to $6,000. This new deduction is in addition to the current additional standard deduction for seniors that was already part of the tax law.
The $6,000 additional deduction is applied on a per eligible individual basis; therefore, a married couple may be eligible for up to $12,000 in additional tax deductions. In order to qualify for the additional deduction, an individual must be age 65 by year-end and their Modified Adjusted Gross Income (MAGI), which is basically all taxable income plus some additions such as adding back the non-taxable portion of Social Security benefits and tax-exempt interest, must be below $75,000 for Single Filers and $150,000 for Joint Filers or the increased deduction begins to phase out (is reduced).
Therefore, it is important for taxpayers to consider all income sources which includes interest income, capital gains, dividends, and retirement plan distributions so they can try to save more tax dollars by maximizing available deductions in addition to reducing taxable income. All of this while monitoring the Medicare premiums that will be subject to IRMAA.