Home & Business Senior Deduction

[humbolta]

The new additional senior deduction for seniors married filing jointly adds $12,000 to the standard deduction, an amount that goes down by 6% for any amount by which the MAGI exceeds $150,000.  My desktop TurboTax Home & Business appears to be using 12%.  I simply wish to report the issue.  I noticed it as I was trying to assess the year-end IRA draws I wish to do.

[VolvoGirl]

The new senior deduction is not added on to the Standard Deduction.   On a joint return the phaseout is calculated separately for each person, so the 6% phases out for each person. This deduction is intended to provide tax relief for seniors and is in addition to the existing standard deduction or your itemized deductions.  It is calculated on 1040 Schedule 1-A.   Here is a spreadsheet I made.

[humbolta]

Thanks.  Here's my example using your same Schedule 1-A example, where I simply put the line number followed by the TurboTax amount in Schedule 1-A as I get in my (relatively new) 2025 TurboTax Home & Business.

31 $151,000

32 $150,000

33 $1,000

34 $60

35 $5,940

36 $5,940

37 $11,880

Note that $11,880 is $120 less than the full enhanced senior deduction, or 12% of the $1000 difference between $151,000 and $150,000.  Now, I haven't read the actual tax code so maybe it's true that the loss of deduction for MAGI exceeding $150,000 is 6% per person or 12% of the joint total above the MAGI.  However, AI and googled website responses suggest that the loss from being $1000 over the $150,000 per my example is only 6% of the $1000, or $60, meaning this line 37 should be $12,940.

Now, maybe such internet answers are wrong.  I'll show one example of my question and its answer from Gemini's AI engine.

Question:  "For a MAGI of $151,000 for a married filing jointly couple where both are seniors, what is the enhanced senior deduction?"

Answer (I've cut out some of the detailed explanations for brevity): "For your specific situation, the deduction is $11,940."

So for my example, the question is whether the correct answer is the $11,880 as shown by TurboTax (12% loss of total amount over $150,000) or the $11,940 shown by Gemini (6% loss of total amount over $150,000).

And, of course, I can use other MAGI's above $150,000 and I'll still get the same 12% loss over $150k via TurboTax and 6% loss over $150k via an AI engine like Gemini.  Are you stating that you believe that 12% is the correct figure? 

[VolvoGirl]

Looks like it.  I put  your 151,000 in my  spreadsheet  and came up with the same result of 11,880.   So it looks like Turbo Tax is doing it the same as me.   Yes it is 6 % per person.  On a joint return the phaseout is calculated separately for each person, so the 6% phases out $6,000 for each person. 

Figure it out by hand the same as me on IRS Schedule 1-A

https://www.irs.gov/pub/irs-dft/f1040s1a--dft.pdf

[humbolta]

My sincere appreciation for your help, and I had no idea there was a link for that draft copy from the IRS.  It teaches me that I can't be too reliant on AI; VolvoGirl is a much better source. 🙂  Upon reflection, your original example was the clue I was missing as if I plug in $200k MAGI, I get a $6000 enhanced deduction while if I plug in $250k, I get a $0 enhanced deduction.  That matches published reports of the enhancement phasing out at $250k.  Thanks, again.

[VolvoGirl]

Thank you GabiU for fixing it.  

His reply post got posted separately or disconnected from this thread

https://ttlc.intuit.com/community/taxes/discussion/re-home-business-senior-deduction/01/3711598#M137...