In July of 2025, Chief Financial Planning Officer Tim Hilterman wrote an article highlighting some of the changes to the tax law in the recent “Big Beautiful Bill.” In this article, we’re going below deck and exploring one of those changes in more detail – the Senior Tax Bonus.
A key feature of this bill is what’s being called the senior bonus, or senior deduction. Beginning in 2025 and running through 2028, taxpayers aged 65 or older can take an additional “bonus” deduction of $6,000 for single filers and $12,000 for those married filing jointly.
Functionally, this is like ordering a stack of three pancakes and getting a fourth. This bonus deduction stacks on top of the normal (also recently changed) standard deduction. Here is what the bonus deduction, stacked with the standard deduction, could look like:
Standard Deduction for 2025
· Single (65+): $15,750
o + $6,000 Senior Deduction
o + $2,000 extra deduction = Total Deduction of $23,750
· Married Joint (both 65+): $31,500
o + $6,000 Senior Deduction ($12,000 total)
o + $1,600 extra deduction per person ($3,200) = Total Deduction of $46,700
This is available whether or not you itemize or take the standard deduction. Still, it is important to note that there is a phase-out that applies for those above certain Modified Adjusted Gross Income (MAGI) thresholds. If you fall in one of these phase-out windows, your bonus deduction goes away:
· Single: $75,000-$175,000
· Married Joint: $150,000-$250,000
What It Means for Seniors
This change could mean significant tax relief for many retirees. A married couple over the age of 65 will be able to deduct $46,700 before paying a dime of federal taxes, potentially resulting in zero federal tax on social security for up to 88% of people. This is a 12% increase in the number of people who could be paying no tax on social security income.
Because this bonus is available alongside itemization, retirees get the benefit of writing off things like donations, mortgage interest, etc., that would not pair with taking the standard deduction, which of course can’t be claimed if you itemize. This also encourages some older folks to continue earning if needed, since the bonus deduction reduces taxes on that earned income as well, to some degree.
Examples:
· Single (65+): AGI = $85,000
o Standard Deduction: $15,750
o Senior extra: $2,000
o Bonus deduction: $5,400 (phased)
= Total Deduction: $23,150
· Married Joint (both 65+): AGI + Social Security = $72,000
o Get full $12,000 senior bonus deduction and likely owe little to no federal income tax.
The second example above is, in essence, the long-promised “no tax on social security.” It certainly isn’t a broad-sweeping no-tax on social security for all, but it can net out to such a reality for those people in certain income situations, in part, because of the new bonus deduction.
Key Highlights
To wrap up, let’s do a quick recap on this bonus deduction:
· Most eligible seniors will see a reduction in their tax bill
o Many Americans in the right situations will end up owing little to no taxes
· Works with itemization
o Unlike other deductions, this bonus works in conjunction with itemized deductions
· Income Thresholds
o This makes planning important when it comes to MAGI
· Short-Term
o This is set to expire after 2028, making it a brief window to maximize.
If you want to learn more about the impact of the recent tax bill or have other questions about taxes, reach out to our CPA, Kage Rush. Kage and Tim also did a recent webinar going over the One Big Beautiful Bill, discussing the changes. You can catch the replay on our YouTube Channel and watch other videos created by our team. Lastly, don’t forget to schedule a meeting with your financial advisor to talk more holistically about your savings strategy and overall plan for retirement.
Senior Tax Bonus: A Deep Dive
September 9, 2025
Nick Allen
Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.
Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.
Whitaker-Myers Wealth Managers is not giving tax, legal or accounting advice, consult a professional tax or legal representative if needed.
Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.
