According to The Hill, income tax calculations in the United States, especially for senior citizens, will see some changes as Donald Trump’s One Big Beautiful Bill (OBBB), which was enacted in July of last year, is implemented.
The publication noted that seniors age 65 and older and with incomes up to $75,000, $125,000 and $250,000 a year can claim between $8,000 and $31,625 when they file in 2029. The cap takes into account any IRS tax deductions available to them.
The development is significant as the US tax filing period begins on January 26, he added.
what are the changes How much discounts do seniors get?
- Under the tax code changes implemented under Donald Trump’s OBBB Act, people age 65 and older are eligible for a new $6,000 deduction, on top of the $2,000 standard deduction that already exists. That requires a basic deduction for income up to $75,000 to $8,000, the report said.
- Furthermore, the US allows a couple to file jointly. So eligible senior couples who jointly earn up to $150,000 can claim a basic deduction of $12,000 to $15,200 (including the standard deduction of $3,200).
- For individuals earning more than $75,000, up to $175,000, their deduction will be reduced by $60 for every $1,000 of additional income above that threshold, he added.
- For senior couples, there will be a phase-out for those earning more than $150,000, up to $250,000.
- The standard deduction of $2,000 for seniors and $3,200 for senior couples was implemented under the Tax Cuts and Jobs Act (TCJA) of 2017, the report said.
- Further, the OBBA also increases the standard deductions applied by the TCJA as follows: $15,750 for single filers, $31,500 for married couples, and $23,625 for heads of households. The last category is applicable across age categories.
- This means that individual seniors can claim a maximum all-inclusive deduction of up to $23,750 and if they are the head of the household, it can increase to $31,625.
- For married couples, the maximum deduction increases to $46,700, the report said, citing calculations by H&R Block.
What is the eligibility requirement?
- Must turn 65 by December 31, 2025.
- Must have a social security number.
- Deductions will be available during the 2028 tax year for returns made in 2029.
How are deductions reflected in taxes?
- The deductions will be provided as refunds after taxes are filed, the report said.
- Those who submit physical documents can expect a refund in six to eight weeks.
- Those who file their taxes online can expect a refund in less than three weeks.
- Those who opt for direct deposit can see refunds even faster. No timeline was specifically mentioned, the report added.
Are these deductions available to taxpayers in all US states?
Deductions under Donald Trump’s The OBBB Act are currently not immediately available to taxpayers in all U.S. states, according to an AP report.
It noted that states can decide whether to incorporate the federal tax cuts into their own state laws, and while some states do so automatically, others require official action to implement the changes.