Senior Tax Issues for 2026 a Mix of Old and New
Senior tax issues have a new – sorry, have to say it – wrinkle in 2026. There’s also details that have been around for a while, but are good to review.
Senior Tax Issues: New for 2026
The primary change for older taxpayers in 2026 is a new senior tax deduction. This part of the One Big Beautiful Bill Act is in place for the tax years 2025 through 2028. With it, seniors 65 and older can get an additional deduction of up to $6,000 per person. This is in addition to the standard deduction for seniors (for tax year 2025, that’s $17,750 for singles, $35,100 for married couples).
There are income limits to the new deduction. It begins to phase out at a Modified Adjusted Gross Income (MAGI) of $75,000 for singles, or $150,000 for couples.
Tax on Social Security
Good news: Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return, according to the IRS. However, if you have any other income (including tax-exempt interest), some portion of your Social Security benefits may be taxable. You add 50 percent of your benefits to all your other income, and if the total is under $25,000 ($32,000 for couples), none of your Social Security is taxable.
As income climbs above those thresholds, an increasing percentage of your benefits is taxable. The maximum portion of your Social Security that can be taxed is 85 percent.
Required Minimum Distributions (RMDs)
RMDs are money taxpayers age 73 or 75 (depending on birth year) are required to withdraw from tax-deferred retirement savings plans. Those plans include 401(k)/403(b)/457, TSP, SEP-IRA and traditional IRA accounts. Regardless of whether you need those distributions or not, they are required by law and taxed as ordinary income.
The amount of RMDs is based on the amount in the retirement account figured against average life expectancy of someone your age.
IRA Withdrawals as Qualified Charitable Contributions (QCD)
Taxpayers over 70 1/2 can transfer money directly from a traditional IRA to a qualified charity (up to $111,000 for tax year 2025). Those transfers are not taxed as income. What’s more, QCDs satisfy necessary RMDs.
Links
AARP lists 10 states where Social Security benefits go the furthest.
Lastly, you can learn more about our services here!
Recent Comments