In July 2025, President Trump's One Big Beautiful Bill passed several tax changes that may be beneficial, especially for seniors:
* Bonus deduction: For those aged 65 and older, starting with the 2025 tax year, seniors will be eligible for a temporary tax break of $6,000 per person. This bonus deduction expires after 2028 and is expected to benefit those with middle incomes. To be eligible for the bonus deduction, you must have a Modified Adjusted Gross Income (MAGI) of up to $75,000 for singles and up to $150,000 for couples. High MAGI filers will see a smaller deduction or no deduction, according to Kiplinger.
This bonus deduction replaces Trump's proposal for no tax on Social Security. This extra deduction will probably eliminate federal income tax on Social Security for middle- and high-income beneficiaries. Low income beneficiaries already don't pay taxes on benefits.
* Higher Standard Deduction. For 2025, single filers can claim a standard deduction of $15,750 while couples filing jointly can claim a standard deduction of $31,500.
* SALT Deduction Jumps. For taxpayers who itemize, the cap on State and Local Tax (SALT) jumps from $10,000 to $40,000 for taxpayers earning below $500,000. This will be in effect through 2029. This will be especially helpful to taxpayers in high-tax states such as California and New York.
