Senior Tax Break Updates (2025–2026, Trump’s Bill)

Senior Tax Break Updates (2025–2026, Trump’s Bill)

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Here’s what actually changed for seniors’ taxes in 2025—and what kicks in for 2026. The Trump administration’s 2025 tax law (H.R.1) adds a new $6,000 deduction for people 65+ (with income limits). Separate bills would end federal tax on Social Security starting in 2026—but as of today they’re not law. Details and action steps below. Internal Revenue Service+1

Quick answer: What changed now vs. 2026?

  • In effect for 2025 returns: A new senior deduction of $6,000 per person age 65+ (2025–2028), phasing out above $75,000 MAGI single / $150,000 joint. It’s in addition to the existing extra standard deduction for seniors. Internal Revenue Service
  • Proposed for 2026 (not enacted as of 9/28/2025): Multiple bills would end federal tax on Social Security benefits beginning 2026. Track H.R. 904 / S.1109, etc. Congress.gov+1
  • Also hitting in 2026:
    • Roth-only catch-ups for employees earning $145,000+ (SECURE 2.0 final regs). Internal Revenue Service
    • Medicare Part B projected standard premium ≈ $206.50 (up from $185 in 2025), with IRMAA surcharges for higher MAGI. AARP

Bottom line: The new 65+ deduction is real now. Social Security tax repeal is not yet law. Plan around Roth catch-ups and Medicare/IRMAA for 2026. Internal Revenue Service+1

The new 65+ deduction in H.R.1 (Trump’s 2025 law): who qualifies & how it phases out

What it is: For tax years 2025–2028, each filer age 65 or older may claim an additional $6,000 deduction. It’s on top of the longstanding extra standard deduction for seniors and, per IRS, has a phase-out starting at $75,000 MAGI (single) or $150,000 (MFJ). Couples with both spouses 65+ can get $12,000 before phase-out. Internal Revenue Service

Who gets it (examples):

  • Single, age 67, MAGI $60,000 → full $6,000.
  • Single, age 70, MAGI $85,000 → phased-down (IRS: 6¢ per $1 over threshold per press explainer; see official instructions when released). Kiplinger
  • Married joint, both 66, MAGI $140,000 → full $12,000.
  • Married joint, both 72, MAGI $200,000 → reduced via phase-out.

Stacking with the “old” extra senior standard deduction: The traditional add-on for 65+ (e.g., $2,000 single / $1,600 per spouse—2024 figures; 2025 amounts to be confirmed) still exists. The new deduction is separate per H.R.1/IRS guidance. Congress.gov

Bottom line: If you’re 65+, assume extra room to reduce taxable income for 2025–2028, subject to MAGI phase-outs. Watch for IRS 2025 instructions to confirm worksheet mechanics. Internal Revenue Service

Source: IRS Newsroom – One Big Beautiful Bill: senior deduction; Congress.gov H.R.1 info, last checked Sep 28, 2025. Internal Revenue Service+1

Will Social Security be taxed in 2026? (Law vs. proposals)

  • Today (2025 rules): Social Security benefits can be federally taxable depending on provisional income.
  • Proposals for 2026: Several bills would end federal income tax on Social Security benefits starting tax year 2026 (returns filed in 2027). H.R. 904 (House) and S.1109 (Senate) are examples; coverage notes the 2026 start if passed in 2025. As of 9/28/2025, none is enacted. Congress.gov+2Congress.gov+2

Bottom line: Don’t plan on Social Security being tax-free in 2026 unless a bill actually passes. Keep monitoring Congress.gov and IRS guidance. Congress.gov

Source: H.R. 904 text & status; S.1109 text; Kiplinger explainer, last checked Sep 28, 2025. Congress.gov+2Congress.gov+2

SECURE 2.0 items seniors will feel in 2026 (Roth catch-ups; RMD rhythm)

Roth-only catch-ups for higher earners (401(k)/403(b)):

  • Starting 2026, employees who earned $145,000+ (from the same employer in the prior year) must make catch-up contributions as Roth (after-tax). IRS finalized implementing regs in Sept 2025. For many, the loss of the immediate deduction can feel like a “tax hit,” though future withdrawals are tax-free if qualified. Internal Revenue Service

RMD timing:

  • SECURE 2.0 previously set RMD age 73 (with later step-ups). IRS keeps examples showing first RMD by April 1 following the year you turn 73, then Dec 31 annually. Internal Revenue Service

Bottom line: Expect after-tax catch-ups if you’re a higher earner, and keep RMD timing straight to avoid penalties. Internal Revenue Service+1

Medicare premiums & IRMAA: tax planning tie-ins for 2026

  • Standard Part B premium projected to rise to about $206.50 in 2026 (from $185 in 2025); deductible also projected higher. AARP
  • IRMAA surcharges: Crossing income thresholds can add substantial Part B/D surcharges; even $1 over a bracket can trigger $1,000+ per year extra in premiums. Appeals are possible for qualifying life-changing events (SSA-44). Kiplinger

Bottom line: AGI management helps you use the 65+ deduction and avoid IRMAA surcharges that effectively tax retirement income. AARP+1

Comparison table: seniors’ changes (2025 vs 2026)

Topic2025 (in effect)2026 (what to expect)Source
New 65+ deduction$6,000 per eligible person (65+), phases out > $75k/$150k MAGI (single/joint); stacks with existing senior add-onProgram continues (through 2028) unless changedIRS; H.R.1 summary. Internal Revenue Service+1
Social Security taxTaxable depending on incomeProposed repeal for 2026 (e.g., H.R.904/S.1109). Not law as of 9/28/2025Congress.gov; Kiplinger. Congress.gov+2Congress.gov+2
Roth catch-upsCatch-ups allowed pre-tax or Roth (plan-dependent)$145k+ earners: Roth-only catch-ups requiredIRS final regs. Internal Revenue Service
RMDAge 73; first by Apr 1 next year, then Dec 31SameIRS RMD page. Internal Revenue Service
Medicare Part BStandard premium $185; IRMAA depends on MAGIProjected ~$206.50; IRMAA thresholds applyAARP; Trustees coverage. AARP

Checklist: 9 moves to consider before 12/31/2025 (to set up 2026)

  1. Estimate 2025 MAGI now to see if you qualify for the $6,000 (per person) 65+ deduction in full; aim to stay ≤$75k/$150k if close. Internal Revenue Service
  2. Harvest losses / manage gains in taxable accounts if a realization would push you into an IRMAA bracket two years later (2027 premiums use 2025 MAGI). Kiplinger
  3. Time Roth conversions: smaller, multi-year conversions may keep you under IRMAA thresholds and within senior deduction limits. Kiplinger
  4. QCDs (Qualified Charitable Distributions) from IRAs after 70½ can reduce AGI and help with IRMAA; coordinate with RMDs. (Confirm with a tax pro.)
  5. If 60–63 and still working: check your plan’s catch-up features; if you earn ≥$145k, prepare for Roth-only catch-ups in 2026. Internal Revenue Service
  6. Model Social Security taxation under current law; don’t assume repeal for 2026 until a bill is enacted. Track H.R.904/S.1109. Congress.gov+1
  7. RMD calendar check if you turned 73 in 2024/2025; plan withholdings so RMDs don’t spike IRMAA. Internal Revenue Service
  8. Medicare appeals (SSA-44): If you had a life-changing event (retirement, spouse’s death), consider an IRMAA appeal to lower 2025–2026 surcharges. Kiplinger
  9. Keep documentation: any claimed deductions, QCD letters, RMD confirmations, and SSA-44 support.

Bottom line: Coordinate deductions + MAGI management + Medicare to keep more of each retirement dollar in 2026. Internal Revenue Service+1

Disclaimer

This guide is general information, not tax, legal, or financial advice. Laws change quickly. Confirm with the IRS, SSA, and a qualified tax professional before acting.

FAQs

1) What is the new senior tax deduction under H.R.1?
An additional $6,000 deduction per person age 65+ for 2025–2028, phasing out above $75k single / $150k joint MAGI; it stacks with the existing senior add-on. Internal Revenue Service

2) Will Social Security benefits be tax-free in 2026?
Not yet. Several bills (e.g., H.R.904, S.1109) would end federal tax on Social Security starting 2026, but none has been enacted as of Sep 28, 2025. Congress.gov+1

3) What’s changing about 401(k) catch-up contributions in 2026?
If you earned $145,000+ from the same employer in the prior year, catch-ups must be Roth (after-tax) starting 2026; IRS issued final regs in Sept 2025. Internal Revenue Service

4) What are projected Medicare Part B premiums in 2026?
The standard premium is projected around $206.50 (up from $185 in 2025). Higher-income IRMAA surcharges add to that. AARP

5) Do RMD rules change in 2026?
No major changes; RMD age 73 remains. First RMD by Apr 1 of the year after you turn 73, then Dec 31 annually. Internal Revenue Service

6) Does the senior deduction help with IRMAA?
Indirectly: lower MAGI can reduce IRMAA risk. But IRMAA uses two-years-prior MAGI and its own thresholds—plan ahead. Kiplinger

7) Can I take the new senior deduction if I itemize?
Per IRS, the new $6,000 65+ deduction is available even if you itemize, but is subject to phase-out at higher MAGI. Verify on 2025 forms/instructions. Congress.gov

“Source:” callouts (sensitive facts)

  • Senior deduction (amounts/phase-out): Source: IRS Newsroom (One Big Beautiful Bill); Congress.gov H.R.1 summaries, last checked Sep 28, 2025. Internal Revenue Service+1
  • Social Security tax repeal proposals: Source: Congress.gov H.R.904 / S.1109; Kiplinger explainer, last checked Sep 28, 2025. Congress.gov+2Congress.gov+2
  • SECURE 2.0 Roth catch-ups (2026): Source: IRS final regs (Sept 15, 2025), last checked Sep 28, 2025. Internal Revenue Service
  • RMD timing: Source: IRS RMD page, last checked Sep 28, 2025. Internal Revenue Service
  • Medicare 2026 premium projection & IRMAA context: Source: AARP and Kiplinger, last checked Sep 28, 2025. AARP+1

Key takeaways & next steps

Takeaways:

  • The new $6,000 (per person) 65+ deduction is in force for 2025–2028 with phase-outs; it stacks with the traditional senior add-on. Internal Revenue Service
  • Social Security tax-free in 2026 is not law yet—track bills; don’t pre-spend any savings. Congress.gov
  • Roth-only catch-ups for $145k+ earners start 2026; RMD age 73 remains. Internal Revenue Service+1
  • Medicare premiums/IRMAA continue rising—plan MAGI to avoid surcharges. AARP

Next steps:

  1. Project your 2025 MAGI and optimize to capture the full 65+ deduction. Internal Revenue Service
  2. Run IRMAA scenarios (using 2025 MAGI) to avoid 2027 surcharges; consider QCDs and gain-harvesting. Kiplinger
  3. If working and ≥50, prep for Roth-only catch-ups (plan Roth space) and check plan updates for 2026. Internal Revenue Service

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