A $6,000 tax deduction for people age 65 and older was created to help fulfill a promise to eliminate taxes on Social Security. Eligibility requires being at least 65 and having modified adjusted gross income below $75,000 for single filers or $150,000 for joint filers. Above those thresholds, the deduction phases out by reducing 6 cents for every $1 of MAGI over the limit. For married couples with both spouses older than 65, the combined maximum deduction is $12,000, but it can be reduced substantially when MAGI exceeds the phase-out start. At higher income levels, the deduction is fully lost, providing no benefit.
"Those over 65 would be eligible for a new $6,000 tax deduction. This deduction is aimed at fulfilling President Trump's promise to eliminate taxes on Social Security. For many retirees, it brings their taxable income to below the threshold where tax kicks in on Social Security."
"First, you had to be 65 or over. And second, your modified adjusted gross income had to be below a specific threshold. That threshold is $75,000 for single tax filers or $150,000 for joint tax filers. Once your income exceeds the threshold, the deduction begins to phase out. Specifically, it reduces by 6 cents on every dollar of MAGI over $75,000 for singles or $150,000 for joint filers."
"For example, a married couple with both spouses older than 65 would be eligible for a $12,000 deduction. But if their MAGI is $178,000, they're $28,000 above the point where the phase-out begins. This means their deduction would be reduced by $1,680 ($0.06 x $28,000), and they'd be able to take just $10,320 ($12,000 combined deduction - $1,680) off their taxable income."
"Once your income hits $175,000 as a single filer or $250,000 as a married joint filer, you lose the entire $6K and get no benefit at all from the new tax break."
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