The OBBB Act for Seniors

The OBBB (One Big, Beautiful Bill) Act introduces a new tax break for seniors. Available from 2025–2028, it offers a direct way to reduce taxable income—but understanding the income limits and planning opportunities is key.

New Above-the-Line Deduction for Seniors

The OBBB Act introduces a significant tax benefit for seniors. Taxpayers who are 65 years of age or older are now eligible for a new above-the-line deduction of $6,000. This deduction allows qualifying individuals to reduce their taxable income directly, potentially lowering their overall tax liability. While this new provision offers meaningful savings potential, understanding the income limits, phase-out rules, and planning opportunities will be key to making the most of it.

Income Limits and Phase-Out

The deduction is subject to phase-out rules. For individuals, the phase-out begins with an Adjusted Gross Income (AGI) above $75,000. For those filing jointly, the phase-out starts at a combined AGI above $150,000. Taxpayers whose income exceeds these thresholds will see a reduction in the deduction amount available to them.

Applicable Tax Years

This special deduction is only available for a limited period. It applies to tax years 2025 through 2028. Seniors should consider this timeframe when planning their tax strategies.

Planning Considerations

Given this new deduction, seniors may want to evaluate their retirement income strategies. For example, considering a Roth conversion could be advantageous, as the above-the-line deduction may enhance the opportunity to generate tax-free income in future retirement years.

This deduction gives seniors a short-term chance to cut taxes and strengthen retirement plans. To see how it fits your strategy, connect with our team for personalized guidance.

_{Source: https://www.irs.gov/forms-pubs/how-to-update-withholding-to-account-for-tax-law-changes-for-2025}