Older adults who face a financial crunch may be happy to know that 2025 federal income tax returns offer a way to get more tax refund cash for those 65 and older. You'll need to qualify — and make sure to file a new Schedule 1-A to claim a special tax deduction. The new, temporary "senior bonus" will enable many taxpayers 65 years old and older to deduct up to $6,000 in income from their federal returns. Plenty of rules and restrictions apply, though, so not everyone in that age group will qualify. If ...

Core Insights - The One Big Beautiful Bill Act (OBBBA) significantly rewrites the federal tax code, introducing new credits and deductions while also presenting potential traps that could limit tax savings [1] Group 1: Seniors Deduction - The OBBBA introduces an additional seniors deduction allowing individual taxpayers over 65 to claim up to $6,000 and married couples filing jointly to claim up to $12,000 [2] - This deduction is only available until 2028, which may lead to missed opportunities for those delaying Social Security benefits until age 70 [3] - Income thresholds for the deduction phase out at $75,000 for singles and $150,000 for married couples, fully phasing out at $175,000 and $250,000 respectively [3] Group 2: SALT Deductions - Changes to the State and Local Tax (SALT) deduction will raise the cap from $10,000 to $40,000 starting in 2025, with annual increases of 1% until 2029, reverting to $10,000 in 2030 [4] - High-income families in states with elevated local taxes, such as New York and California, will benefit the most from this change [5]