2025 Senior Deduction under the OBBB

[maryherndon54]

The 2025 Senior Deduction under the OBBB allows up to a $6k ADDITIONAL deduction per taxpayer for taxpayers 65 or older by 2025 yr end. The deduction is phased out once MAGI exceeds $75k for a single taxpayer or $150k for MFJ taxpayers. This has been confirmed by TurboTax in previous discussions this year.

To find this deduction you need to go to Schedule 1-A (new this year) Parts V & VI, where the deduction is calculated automatically.  The result is entered on 1040 on line 13c.

[VolvoGirl]

 My Home & Business on Windows 11 is working right.  Have you updated your program?  The Enchanced Senior Deduction is automatic and is listed separately from your Standard Deduction.   The 6,000 senior deduction will be calculated on 1040 Schedule 1-A page 2 Part V Enhanced Deduction for Seniors.  . On a joint return the phaseout is calculated separately for each person, so the 6% phases out $6,000 for each person. 

Schedule 1-A total on line38 goes to 1040 line 13b.         
https://www.irs.gov/pub/irs-dft/f1040s1a--dft.pdf

Here is a spreadsheet I made

[VolvoGirl]

Have you opened the Forms Mode?  Here is Schedule 1-A from Home & Business

[maryherndon54]

Thank you for your quick reply.  I found Schedule 1-A immediately after I posted my question, but was unable to take the question down.  So instead I edited it, turning it into instructions for how to find the deduction on the 2025 software.  You can go back and see that my question became instructions instead.

Again, I appreciate your quick response.  Nice to know there are people out there who care.

[shirlandron]

I opened forms mode and do not see schedule 1A help?

[shirlandron]

If a file a joint return schedule 1A shows up but if I file married filing separate it does not show up?  Help! 

[xmasbaby0]

@shirlandron It does not show up when you file MFS because you are disqualified for the $6000 senior deduction if you file MFS.   You can get that deduction if you are filing Single, Married Filing Jointly, or Head of Household.

[user17691893285]

I learned that using Turbotax Basic, the new Senior Deduction shows up as a Qualified Business Expense. However, if I switch to Deluxe, it appears properly as the Senior Deduction. I switched back to Basic and appears as a QBI. I wnat to be sure my return is filed properly. Can this be corrected in the software? 

[DoninGA]

@user17691893285 There is not a TurboTax Basic desktop edition for tax year 2025 for US tax returns - https://turbotax.intuit.com/personal-taxes/cd-download/

[VolvoGirl]

@user17691893285   Can you post a screenshot?  

[user17691893285]

Basic Version:

Basic Version

Deluxe Version:

Deluxe Version

[user17691893285]

The online chat I had did not help.

[user17691893285]

I am using online version

[theady]

The desktop Turbo Tax is not computing the enhanced senior deduction correctly for married filing jointly. It should calculate the MAGI over $150,000 and subtract 6% of that amount from $12,000. However, the current logic is subtracting that 6% over the $150,000 from each eligible senior, or effectively doubling the amount of the reduction.

Example: Assume total MAGI of $214,000. The reduction would be $214,000 - $150,000 =$64,000.00 x .06 =$3,840.00 reduction. That would reduce the joint enhanced deduction to $12,000 - $3,840 = $8,160. However, the Turbo Tax tool is subtracting $3,840 from each eligible’s $6,000, leaving an enhanced senior deduction per eligible of $2,160 for a total joint enhanced deduction of only $4,320. A $3,840 understatement of the allowed deduction. I’m trying to connect with Turbo Tax to see if they are working on fixing this.

[VolvoGirl]

@theady  Sorry, Turbo Tax is right.  On a joint return the phaseout is calculated separately for EACH person, so the 6% phases out for each spouse, making it effectively 12%.

Fill out the actual IRS SCH 1-A by hand to check….