Top Tax Deductions Every Senior Should Claim in 2025

To be honest, 2025 is not like other years when you had to pay taxes.

If you’re over 65, there are big changes that will directly effect how much tax you pay and how much you can legally keep. Most seniors can now claim thousands of dollars in deductions without having to perform intricate tax preparation because of the new regulations.

The big change? The One Big Beautiful Bill (OBBBA) created new provisions that gave seniors an extra $6,000 deduction on top of the standard deduction and other benefits for seniors. That changes the game. It means that millions of retired people won’t have to pay taxes on their Social Security payments anymore. Some people won’t have to pay any federal taxes at all.

Let me make this easy for you: You could miss out on a lot of money if you don’t know what changed in 2025. And worse, you might have to pay taxes that you don’t owe.

I’ve read articles that don’t go into detail about this or just throw numbers about without explaining what they mean. So, in this guide, I’ll show you how to:

• The exact deductions that are important in 2025
• How much you can truly claim (with real numbers)
• What income levels cause benefits to go away
• How to keep from having to pay taxes on your Social Security benefits
• And those deductions that most seniors don’t aware about

You’ll leave this post with a clear list of things to do and perhaps a few thousand bucks more in your pocket.

But first, let’s be clear about what the IRS really changed.

1. The Standard Deduction Just Got Bigger — Especially for Seniors

This is where most seniors start to win.

The IRS raised the standard deduction in 2025 to keep up with inflation. If you are filing as single, your base deduction is $15,000. Couples who are married and file together get $30,000. But if you’re 65 or older, you get even more.

For seniors, there is an extra deduction:

• $2,000 if you are not married
• $1,600 for each spouse if they are both 65 or older and married

That means that a married couple over 65 who is retired could automatically lower their taxable income by $33,200 without having to list anything.

What does this mean?

This one step can lower your taxable income enough that your Social Security income is completely tax-free. This is especially true when you add the new $6,000 bonus deduction (which we’ll talk about next). It also means that a lot of retirees don’t even have to keep track of their receipts or list their deductions. It’s easy, automatic, and has a big effect.

But here is the bit that most folks miss:

You still need to see if itemizing could save you more money. If you have a lot of medical costs, gifts to charity, or hefty property taxes, it’s worth it to do the math.

Most articles merely urge you to accept the term “standard deduction” without Muscles: “no questions asked.” That’s bad counsel. The greatest choice really relies on how much money you make and how much you spend.

A quick summary:

• Standard deduction for a single person over 65: $15,000 + $2,000 = $17,000
• Married (both over 65): $30,000 + $3,200 = $33,200

You don’t have to do anything out of the ordinary to get it. When you file, just tick the right box.

What you need to do: Look at these statistics and compare them to your possible itemised deductions. If they’re lower, use the standard. If not, dig deeper.

2. The New $6,000 Senior Bonus Deduction (Most People Still Don’t Know This Exists)

Let’s talk about the new $6,000 extra deduction just for seniors. It’s a big game changer.

The One Big Beautiful Bill (OBBBA) was passed in late 2024 gives every taxpayer over the age of 65 an extra $6,000 deduction on top of the standard deduction. And this tax break doesn’t go away like some others do, until you make a lot of money (MAGI over $120,000 for singles, $180,000 for joint filers).

What does that mean in simple terms?

If you’re a single senior, your standard deduction, age-based addition, and bonus look like this:

• Standard $15,000
• $2,000 (65+ bump)
• $6,000 bonus = $23,000 off the total

For a couple who is retired and over 65:

• Standard: $30,000
• $3,200 (both are 65 or older)
• $12,000 in bonuses = $45,200 in total deductions

And that’s not even counting medical bills or donations to charity.

This is a big change in how seniors pay taxes. According to Investopedia, this change alone means that up to 88% of seniors will no longer have to pay federal taxes on their Social Security payouts. That’s not a claim made for commercial purposes; it’s based on real IRS modelling.

This deduction isn’t talked about much in the press, and tax prep software might not even bring it up until you hunt for it. That’s not good. If you file without this in mind, you’re paying way too much.

What you need to do:

Make sure that your 2025 tax software, CPA, or filing tool has this senior bonus deduction. Don’t think it’s automatic, especially if you’re utilising tools or templates from last year.

Tip for Professionals:

If your Adjusted Gross Income (MAGI) is close to $120,000 for a single person or $180,000 for a couple, you should talk to a tax adviser about how to minimise it. That way, you won’t lose the whole deduction.

3. Social Security Is Finally Tax-Free for Most Seniors — But Only If You Do This Right

People ask me this the most: “Why do I have to pay taxes on my Social Security?”

If you’re like most older people, you were promised that your Social Security would not be taxed. But the IRS came nonetheless. That’s because in the past, if you made a certain amount of money, even if it was only $25,000 for singles, some of your benefits were taxed.

Things changed in 2025. Most middle-income seniors are now below the taxable threshold because of the higher deductions (standard, senior bump, and bonus). That means you get to keep all of your Social Security checks.

But here’s the thing: the IRS still uses something called “provisional income” to figure out if your benefits are taxable. That means:

• Half of your Social Security money
• Pensions or IRA withdrawals that are taxable
• Interest and dividends
• Other income from work (if any)

If that amount is more over the limit ($25,000 for singles and $32,000 for couples), some of your Social Security benefits become taxable, up to 85% of them. But the new deductions cut your taxable income, so more seniors are now safely below that level.

A lot of websites don’t show you how to conduct those maths. But you need to know how this really works.

Your next step is to run the figures. Add up your temporary revenue and see what you get. If you’re near to the limit, lower the amount you take out of taxable accounts or switch to Roth income if you can.

Helpful tip: You can use this IRS tool to see if your Social Security benefits are taxable.

If you’re not sure when to start your benefits—or how timing affects your taxes—check out our guide on when you should take Social Security. It breaks down your options in plain English.

4. Medical Expenses: One of the Most Underused Deductions by Retirees

To be honest, healthcare costs a lot when you’re older. Most seniors don’t know that you can deduct a lot of those medical costs, but only if you prepare ahead.

This is how it will function in 2025:

You can deduct the difference if your eligible medical expenses are more than 7.5% of your Adjusted Gross Income (AGI). This includes:

• Medicare premiums for Parts B, C, and D
• Long-term care insurance premiums (with limits)
• Care for teeth and eyes
• Copays, hospital expenses, and lab fees
• Hearing aids and mobility aids
• Care at home or at a nursing home (if medically necessary)

Now it gets interesting: Many seniors have a lower AGI since they don’t make as much money in retirement, so they can pass the 7.5% line more easily. And if you’ve had a bad year with your health—surgeries, rehab, long-term prescriptions—you might be able to deduct $5,000 to $15,000 and not even know it.

But here’s the issue: Most retirees don’t keep track of their expenses. They depend on Medicare statements and forget about the extras. That’s money you could have had.

What you need to do:

Look at your receipts and insurance summaries from 2025 again. Count it all up. If your AGI is more than 7.5%, you might choose to itemise, especially if you’ve already reached that standard deduction with room to spare.

Managing healthcare costs is just one part of smart retirement planning. You can find more tips in our list of smart budgeting strategies for seniors.

If you have a Health Savings Account (HSA) or pay for long-term care insurance, you should talk to a tax professional. These can raise your deduction or possibly make you eligible for extra benefits.

5. The Tax Credit for the Elderly or Disabled: Overlooked, But Powerful

This is one of those deductions that you don’t hear about very often, even though it’s been around for a long time.

The Tax Credit for the Elderly or Disabled lowers your tax burden directly, not only your income. That implies that if you qualify, it can cut your tax bill by hundreds of dollars, not just your taxable income.

In 2025, these people will be able to get it:

• At the end of the tax year, you are 65 years old or older OR
• You are permanently disabled and getting taxable disability income. AND
• Your income is below the IRS restrictions, which are usually $25,000 for singles and $32,000 for couples (but check the details).

This is why it doesn’t get used much:

It’s not automated. You need to fill out Schedule R, but the directions are hard to follow. A lot of tax software simply skips it or hides it until you look for it. You probably won’t see it if you’re utilising a free file tool or not dealing with a tax pro.

But it’s money.

You might save between $375 and $1,125 on your taxes, depending on how you file. That may not seem like much, but for someone on a fixed income, it’s enough to pay for a month’s worth of groceries or a utility payment.

Quick example: You’re 68 years old, single, and after deductions, your total taxable income is $9,000. You can get the credit. This credit could cover most or all of your $500 tax bill.

What you need to do:

You might ask your tax preparer or software, “Am I eligible for the Credit for the Elderly or Disabled?”
Then, if it applies, make sure to attach Schedule R with your return.

IRS Publication 524 lays things down for you. Yes, it’s boring, but it provides the numbers you need.

6. Selling Your Home? You Could Pocket $250,000 (or More) Tax-Free

If you’ve lived in your home for a long and are thinking about moving to a smaller one, here’s some good news:
When you sell your main home, the IRS lets you keep up to $250,000 of your capital gains tax-free. For married couples, it’s $500,000 that is tax-free.

This isn’t new, but it’s one of the most important tax breaks that seniors forget about.

Here are the requirements:

• You must have owned the house for at least two of the last five years.
• You have to have lived in it as your main home for two of those years.
• You haven’t used this exclusion on any other homes in the last two years.

You bought your house 25 years ago for $150,000 and are now selling it for $500,000. That’s a $350,000 gain, but if you file as a single person, you won’t have to pay any taxes on it, and as a couple, you won’t owe anything.

What about the capital gains tax on improvements?

Another benefit is that you can raise your “cost basis” by adding the value of big renovations, such a new roof, a kitchen makeover, or an HVAC system. That makes your taxable gain even smaller.

A lot of articles don’t talk about this the appropriate way. They either make the “ownership and use” criteria too simple or leave it out altogether. But for seniors who want to move or downsize and get closer to family, this one provision can free up hundreds of thousands of dollars in tax-free income.

If you want to sell, your next step is to get receipts and documents of any improvements. Talk to a tax expert about how to figure out your adjusted basis and make sure you qualify for the exclusion.

Even if you move into a retirement community or assisted living, you may still qualify as long as you stayed in the home for two of the five years before moving out.

7. Charitable Giving? Use a QCD and Pay Zero Tax on IRA Withdrawals

If you’re over 70½ and want to give to charity, there’s a great way to do it that can save you thousands of dollars in taxes, but you have to know how to do it.

A Qualified Charitable Distribution (QCD) is what it’s called.

If you have a traditional IRA, you can give up to $100,000 a year directly to an eligible charity. The money flows straight from your IRA to the organisation, and you don’t have to pay taxes on that withdrawal.

That’s a lot. When you take money out of your IRA, it usually counts as taxable income. But it doesn’t with a QCD. Also, it still contributes towards your Required Minimum Distribution (RMD), which starts at age 73 in 2025.

Why is this important for seniors?

When you have to take RMDs, they can raise your income high enough to make your Social Security taxable or possibly raise your Medicare payments. A QCD can help you lower or get rid of that danger.

A lot of tax papers solely talk about itemised deductions for giving to charity, yet a lot of older people don’t itemise. So they lose out. A QCD is better than a deduction because it lowers the amount of money you owe in taxes.

If you’re 70½ or older and have an IRA, your next step is to talk to your broker or advisor about setting up a QCD. There can’t be any stops along the way from the IRA to the charity.

Tip: Keep track of things. Form 1099-R and Form 1040 are the right forms to report to the IRS. A lot of older people forget to do the paperwork, and they lose the benefit.

8. State-Level Senior Tax Breaks You Might Be Missing (Even If You’ve Lived There for Years)

People talk a lot about federal deductions, but your state can be giving you a lot of tax breaks as well. And most older people don’t know it exists.

Some states have:

• Extra personal exemptions or standard deductions for older people
• Full or partial exemptions from Social Security income
• Tax breaks for tenants or homeowners with modest incomes
• Property tax “circuit breaker” initiatives that give back money for overpayments
• Tax prep programs for seniors that are free
• Lower tax rates for 401(k) or IRA withdrawals, pensions, or annuities

The difficulty is that state tax websites are hard to understand. If you don’t engage with a local tax professional, you’re probably filing your taxes the same way everyone else does, which means you’re missing out on money.

For instance:

• In South Carolina, all military retirement income is not taxed at all.
• People over 65 in New York can leave out up to $20,000 of their pension income.
• For seniors 65 and above, Georgia has a $65,000 retirement income exclusion.
• Even if seniors don’t itemise, Colorado lets them defer their property taxes.
• Most tax software doesn’t point things up until you look for them.

What you need to do:

Search for “senior tax breaks” or “senior property tax relief 2025” together with your state name.
Even better, phone your local Department of Revenue or Ageing Office. They can often tell you exactly what you can get. It could take 20 minutes, but it could save you hundreds (or even thousands) of dollars in taxes.

Not sure where to begin or who to trust? We put together a list of free tax help services for seniors to make things easier.

Even if you don’t pay state income tax, you could still be able to earn rebates or credits on things like rent, property tax, or energy bills, especially if your income is steady.

So, What Should You Do Next?

The truth is that the tax law isn’t meant to help you; it’s meant to confound you. But if you’ve read this far, you already know more than 90% of retirees.

You know that 2025 is a year that will change everything. This isn’t the year to just “file like usual” because of the new $6,000 senior bonus, medical write-offs, QCDs, and state-level incentives.

If I were you, this is what I would do:

• You can print off this list or save it to your computer.
• If your tax preparer missed any of these, talk to them or seek a second opinion.
• Don’t think that software will make things better for you; run your figures.
• Get what you deserve—don’t let these benefits go to waste.

Above all, don’t wait till April. Planning now, in the middle of the year, affords you choices. After December 31st, a lot of these plans become set in stone.

Let’s make this an activity:

• Do you plan to get the senior bonus this year?
• Have you ever utilised a QCD and then found out later that you missed a deduction?

Leave your answer in the comments or send this to a retired person who needs to read it.
You shouldn’t have to work for your money; it should work for you.

Want to Save More on Your 2025 Taxes?

Go to FameTribute.com and get our free checklist of tax deductions every senior should know.

No jargon. Just simple tips that help you keep more of your money.

Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Please consult a qualified tax professional before making any decisions based on this content. Tax laws may vary by state and can change over time.