2025 Senior Deduction under the OBBB

[VolvoGirl]

@theady   Here’s my spreadsheet I made for someone else having  211,000 AGI close to yours.  My spreadsheet matches the IRS and Turbo Tax 

[maryherndon54]

Volvogirl is correct.  The 6% calculation is per person, not per couple.    This would be 100% fair if the upper threshold for MFJ was $350,000 (2 x $175,000) .  But it isn’t.  It’s $250,000   So in effect, there is a marriage penalty.  I was confused at first myself.

[dillar]

In the Online version, when you do the "Explain my Taxes" in "Federal Review" you get this:

Your total deductions for the year were $xx,xxx, including:
- Itemized Deductions: $xx,xxx
- Deductible mortgage interest, $xx,xxx
- Deductible Charitable Contributions, $x,xxx
- State and Local Tax Deduction, $xx,xxx
- Qualified business income deduction, $5,296    <==== This should read as Senior Deduction not QBI

When I hand calculate based my income 5,296 is the correct calculation for Senior Deduction.  It's just the wrong description in this Review page 

[natural-52]

Right now SC is adding the $12000 back plus another $1500 adjustment to the standard deduction. What to do?

[theady]

Thanks for the clarification. Seems there's a penalty baked into the calculation for married filing jointly. Not surprising.

[SuziM]

Hi @user17691893285 

Thank you for reaching out and sharing your experience; we would like to investigate this issue further.  If you’re willing, we would like to ask if you could provide a Diagnostic File of your return.  This copy will be purged of all personally identifiable information.  If you are willing, please follow the instructions provided below to get us the information we need. 

TurboTax Online​

1. Sign-in to your online account. ​ 
2. Select "Pick up where you left off"
3. Click on “Tax Tools” to the left hand side of the screen. ​ 
   
4. Select "Tools" 
5. A drop-down will appear. Click on “Share my file with  Agent”. This will generate a message that a diagnostic copy will be created.
6. When the token is generated, be prepared to type in your notes or in a message (unable to copy and paste) 
7. Click “OK”.  The tax file will then be sanitized and sent to us. This action will generate a Token Number  
8. Please respond directly to this message and provide the Token Number that was generated.  

TurboTax Desktop  

1. Open your return. ​ 
2. Click “Online” and select "Send Tax File to Agent". ​ 
3. This will generate a message that a diagnostic copy will be created. Click “OK”. The tax file will then be sanitized and sent to us. This action will generate a Token Number  
4. Please respond directly to this message and provide the Token Number that was generated.  

Please confirm what version of TurboTax you are using. 

[Temecularevev]

Still doesn't make any sense for MFJ each member being separately subjected to the $6000 limit. Even the "Turbo Tax FAQ" topic "What is the new tax law for the senior deduction" states that MFJ will will completely phase out if income is above $350,000." But when my AGI is $272,000, I'm out of luck, not partial deduction. It seems that line 35 (Schedule 1a) should have two options: single $6000, married $12,000. That would make the "phase out" fair for both single and married.  Not a Turbo Tax issue, IRS calculates the same way. MFJ doesn't get the full phase out benefit.

[xmasbaby0]

The senior deduction phases out completely at $250,000 on a joint return---not at the $350,000 you cited.

The “senior deduction” is added automatically by the software based on the date of birth and filing status you entered into MY INFO.  You do not need to take any extra steps to enter it. (And…the new senior deduction has nothing to do with whether you are getting Social Security)

The deduction is not on the same line as your standard deduction.  It is shown separately.on line 13b.

2025 STANDARD DEDUCTION AMOUNTS

SINGLE $15,750  (65 or older/legally blind + $2000)

MARRIED FILING SEPARATELY $15,750  (65 or older/legally blind +1600)

MARRIED FILING JOINTLY $31,500  (65 or older/legally blind + $1600)

HEAD OF HOUSEHOLD $23,625 (65 or older/legally blind + $2000)

For 2025 through 2028 there is an extra  deduction amount of up to $6000 per individual 65 or older filing Single, MFJ, or HOH which is phased out for taxpayers with modified adjusted gross income over $75,000 for single filers and $150,000 for joint filers.

(The deduction phases out completely at $175.000 Single or HOH, or $250,000 joint)

The $6,000 senior deduction will be calculated on 1040 Schedule 1-A page 2 Part V Enhanced Deduction for Seniors which goes to 1040 line 13b. It is separate and in addition to the Standard Deduction or your Itemized Deductions on 1040 line 12e.  Turbo Tax automatically includes it.

IRS Schedule 1-A
https://www.irs.gov/pub/irs-dft/f1040s1a--dft.pdf

Need to see it?

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-return/preview-turbotax-online-retur...

If you are not getting the senior deduction it is because

Your date of birth in MY INFO shows that you were not 65 by the end of 2025

Your income is too high

You are filing married filing separately

[VolvoGirl]

@Temecularevev  @SuziM   I searched for that FAQ.   

What is the new tax law for the senior deduction?

That Turbo Tax FAQ is wrong for Joint Max.   It should be 250,000 not 350,000.