The One Big Beautiful Bill Act introduces a senior deduction, significantly lowering federal income taxes on Social Security benefits for seniors. The standard deduction increases, providing $6,000 for individuals and $12,000 for married couples aged 65 and over. This change allows 88% of seniors to escape federal tax on their benefits. Indiana’s 1.2 million seniors will see tax relief, while working residents can expect substantial real-wage increases under the new law, indicating economic improvements for both retired and employed individuals across the state.
The One Big Beautiful Bill Act (OBBBA) includes a provision being dubbed the senior deduction, which substantially reduces the number of seniors who pay federal income taxes on their Social Security benefits.
The new law boosts the standard deduction and layers on a new senior-specific deduction-$6,000 for individuals and $12,000 for married couples filing jointly, provided both are 65 or older.
These reforms deliver the largest tax break in history for America's seniors, according to the White House, adding that the goal is to help seniors save more of their money.
Of those, 1.2 million are expected to benefit from the new Social Security tax exemption under the OBBBA, according to the White House.
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