How the One Big Beautiful Bill Affects Your 2025 Tax ReturnDisclaimer: I’m not a financial advisor. This is just a breakdown of publicly available information on the One Big Beautiful Bill Act and how it might affect retirees. Everyone’s situation is different, so check with a qualified tax professional before filing.
Hey crew. Been doing some digging ahead of filing my taxes, mostly on what impact the OBBB will have on returns, if you’re retired (or getting close to it) and planning as I am for your
2025 federal tax return, I think there’s good news. The
One Big Beautiful Bill (OBBB) includes several changes that can
keep more of your hard-earned money in your pocket. Let’s go through the main points.
1. Bigger Standard Deduction The law raised the standard deduction. Married couples filing jointly can take
$31,500, single filers
$15,750, and heads of household
$23,625. That’s money off your taxable income right from the start—straightforward, no gimmicks.
IRS Source2. Extra Deduction for Seniors If you’re
65 or older, you get an
extra $6,000 deduction (or $12,000 if both spouses are 65+). This is added on top of the standard deduction or your itemized deductions. Most retirees can subtract a large portion of their income before taxes are calculated, often making Social Security and modest investment income
non-taxable. It phases out for higher earners: $75,000 single, $150,000 married.
IRS Source3. Expanded SALT Deduction If you own a home and pay state or local taxes, the SALT cap went from $10,000 to
$40,000 for 2025–2029. Most retirees will still take the standard + senior deduction, but if you itemize, it can help.
NACo Source4. Social Security Taxes The law doesn’t actually change Social Security taxes. The extra senior deduction is what often makes your benefits non-taxable.
AP News Source5. Temporary Relief Most retiree-focused breaks apply
2025–2028 (SALT through 2029), so enjoy them while they last.
H&R Block SourceBefore-and-After Example Typical Retired Couple, Ages 69 & 60, Filing Jointly| [th]Item[/th][th]Pre-OBBB 2025[/th][th]Post-OBBB 2025[/th] |
| Standard Deduction | $25,900 | $32,200 |
| Extra Senior Deduction | $0 | $6,000 |
| SALT Deduction Cap | $10,000 (if itemizing) | $40,000 (if itemizing) |
| Total Deductions | $25,900 | $38,200 |
| Taxable Income | $14,100 | $1,800 |
| Federal Income Tax Owed (approx.) | $1,400–$1,700 | $180 |
Bottom Line Thanks to OBBB, a typical retired couple could
slash their taxable income by over $10,000 and reduce federal taxes owed by more than
$1,200. That’s money that stays in your hands, not Washington’s. Your mileage may vary, so check with a qualified tax professional. For many retirees, these provisions are a welcome boost.
— Gonzo
