Every week, in our Ask the Editor sequence, Pleasure Taylor, The Kiplinger Tax Letter Editor, solutions questions on matters submitted by readers. This week, she’s questions on the brand new $6,000 deduction for taxpayers 65 and older. (Get a free challenge of The Kiplinger Tax Letter or subscribe.)
1. Social Safety Advantages
Query: I’m retired and obtain month-to-month Social Safety advantages. I heard that the newly enacted so-called “One Massive Lovely Invoice” (OBBB) eliminates federal revenue tax on Social Safety advantages. Is that correct?
Pleasure Taylor: No, the OBBB doesn’t make Social Safety advantages absolutely tax-free. Many Social Safety recipients now pay federal revenue tax on as much as 85% of their advantages, relying on their provisional revenue. President Trump promised to finish the tax. However the course of that Republican lawmakers used to move the OBBB whereas circumventing the 60-vote filibuster rule within the Senate didn’t enable this revenue tax change to Social Safety advantages. So lawmakers discovered another technique of tax aid for seniors within the OBBB.
There’s now a brand new senior tax deduction of $6,000 per filer age 65 and older. Married {couples} with each spouses 65 and older can deduct $12,000 on a joint return. This deduction is out there to taxpayers who declare the usual deduction and to those that itemize on Schedule A of the Type 1040 or 1040-SR. This deduction is non permanent, first taking impact on 2025 tax returns filed subsequent yr, and ending after 2028.
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Not each senior will qualify. The deduction begins to part out at modified adjusted gross incomes (or modified AGIs) above $150,000 on joint returns and $75,000 on single and head-of-household returns. The deduction is absolutely phased out as soon as modified AGI reaches $175,000 for single and head-of-household filers and $250,000 for joint filers. Additionally, every eligible partner will need to have a Social Safety quantity to assert this write-off.
2. How one can Itemize on Schedule A
Query: I itemize deductions on Schedule A of the Type 1040 yearly as a substitute of claiming normal deductions. Can I take the $6,000 senior deduction even by means of I itemize?
Pleasure Taylor: Sure, the deduction is out there to taxpayers who declare the usual deduction and to those that itemize on Schedule A of the Type 1040 or 1040-SR. I’m guessing that the IRS will add one other line to the 2025 Type 1040 after the road for normal deductions to account for this new senior deduction or, alternatively, add a line to Schedule 1 of the 1040.
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3. Filers 65 and Older Who Don’t Obtain Social Safety Advantages
Query: My spouse and I are each retired federal staff, and we’re older than 65. We obtain a Civil Service Retirement System pension, however we don’t obtain Social Safety advantages. Can we declare the $6,000 senior deduction on our 2025 Type 1040 although we don’t get Social Safety advantages?
Pleasure Taylor: Sure, you’ll be capable of declare the $6,000 senior deduction (per partner) in your 2025 Type 1040, topic to the modified AGI phaseouts mentioned in Query 1. Since you might be submitting a joint return together with your spouse, and you might be each 65 or older, you possibly can deduct $12,000. You wouldn’t have to obtain Social Safety advantages to take the deduction.
4. Modified Adjusted Gross Earnings
Query: I’m married and file a joint tax return. I do know that the $6,000 senior deduction for filers age 65 and older begins to part out at modified adjusted gross incomes over $150,000 for joint filers. What’s modified adjusted gross revenue?
Pleasure Taylor: Modified adjusted gross revenue (or modified AGI) is commonly utilized by the IRS to find out your eligibility for sure tax advantages or tax breaks or to find out whether or not you might be topic to surtaxes or surcharges. True to the complexity of the federal tax code, the definition of modified AGI typically differs, relying on what it’s used for.
To calculate modified AGI for functions of the revenue threshold for taking the $6,000 senior deduction, you start together with your adjusted gross revenue on line 11 of your Type 1040 and add any international earned revenue exclusion, international housing exclusion, and any quantities excluded from gross revenue as a result of they have been acquired from sources in Puerto Rico or American Samoa.
About Ask the Editor, Tax Version
Subscribers of The Kiplinger Tax Letter and The Kiplinger Letter can ask Pleasure questions on tax matters. You will discover full particulars of learn how to submit questions in The Kiplinger Tax Letter and The Kiplinger Letter. (Subscribe to The Kiplinger Tax Letter or The Kiplinger Letter.)
We’ve already acquired many questions from readers on tax adjustments within the OBBB. On this column, we’ve got addressed questions on the brand new $6,000 deduction for taxpayers who’re age 65 and older. We are going to reply extra queries on the OBBB in future Ask the Editor round-ups. So hold these questions coming!
Not all questions submitted will likely be printed, and a few could also be condensed and/or mixed with different comparable questions and solutions, as required editorially. The solutions offered by our editors and consultants, on this Q&A sequence, are for basic informational functions solely. Whereas we take affordable precautions to make sure we offer correct solutions to your questions, this data doesn’t and isn’t meant to, represent unbiased monetary, authorized, or tax recommendation. You shouldn’t act, or chorus from appearing, primarily based on any data offered on this function. You need to seek the advice of with a monetary or tax advisor relating to any questions you’ll have in relation to the issues mentioned on this article.
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