One Big Beautiful Bill Adds $6,000 Deduction for Social Security Beneficiaries
Starting in 2025, adults age 65 and older can claim an additional deduction of $6,000 on their federal income tax return under the One Big Beautiful Bill (OBBB) Act. Married couples where both spouses qualify may claim up to $12,000. This provision is available through 2028.
The deduction begins to phase out for individuals with modified adjusted gross income above $75,000 ($150,000 for joint filers) and phases out completely at $175,000 for single filers and $250,000 for joint filers. It applies to both itemizing and non-itemizing taxpayers. Eligible taxpayers must include the Social Security Number of qualifying individuals on their return and file jointly if married.
This extra deduction provides practical tax relief for adults relying on Social Security, helping many keep more of their retirement income. While it does not fully exempt benefits from taxation, it reduces taxable income for those under the income thresholds, offering meaningful financial breathing room.
For taxpayers with modified adjusted gross income (AGI) approaching $150,000 for joint filers or $75,000 for individuals, small adjustments in income could help preserve the full benefit of the $6,000 deduction. AAFCPAs advises that clients in this situation review income, deductions, and filing status with their advisor to ensure they maximize this opportunity.
For adults 65 and older receiving Social Security and with income below the phase-out limits, this provision represents a welcome reduction in taxes owed and an additional tool to manage retirement finances.
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AAFCPAs’ Individual & Family Tax practice provides comprehensive tax planning, compliance, and wealth preservation solutions for high-net-worth individuals. We work closely with clients to identify deductions, optimize tax strategies, and coordinate with wealth managers and estate planning attorneys to address both short- and long-term financial goals. From managing retirement income and Social Security considerations to structuring inheritances, planning for business succession, and navigating complex investments, we tailor strategies to each client’s circumstances. Our approach gives clients clarity and confidence in their financial decisions, leveraging practical solutions and coordinated planning to maintain financial stability, preserve wealth, and support the lifestyle and legacy they envision.
These insights were contributed by Daniel Seaman, CPA, Tax Partner.
Questions? Reach out to our author directly or your AAFCPAs partner.
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