"Retirees will enjoy a generous new tax break in 2026, courtesy of the One Big Beautiful Bill Act. Eligible taxpayers who are 65 and over and whose income doesn't exceed allowable limits will be able to take advantage of a new $6,000 increase to the standard deduction. This means a married senior couple could deduct as much as an extra $12,000 from their income tax bill."
"According to the Center for Retirement Research, the big problem with the new tax break in the One Big Beautiful Bill Act is the impact that it will have on Social Security. As the CRR's report states, "First of all, it should be noted that this tax break worsens the tenuous fiscal condition of Social Security. Social Security actuaries estimate that the new tax provisions will move up the trust fund depletion date by roughly six months - from the 3rd quarter to the 1st quarter of 2034.""
Beginning in 2026, taxpayers aged 65 and over with incomes below set limits receive a $6,000 increase to the standard deduction, allowing a married senior couple an extra $12,000 deduction. The Administration also raised base standard deductions, resulting in 2026 deductions of $23,750 for single seniors and $46,700 for married joint filers, subject to income caps. These changes remain temporary through 2028. The Center for Retirement Research projects the tax changes will worsen Social Security finances, moving the trust fund depletion date forward by roughly six months to the first quarter of 2034. Taxation thresholds for benefits remain $25,000 (single) and $32,000 (married joint) in provisional income.
Read at 24/7 Wall St.
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