What to know about the $6,000 ‘senior deduction

OneEyedDiva said:
Exactly MJ !
Also I want to know will this take affect with the 2025 tax return? And since it's touted as an addition $6,000 why does it only add a few hundred dollars to the deduction? Seems like smoke and mirrors to me.
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because if someone is in the 12% tax bracket that’s all the tax is , 720 dollars . or 1320.00 in the 22% bracket

it can’t represent much when you don’t pay much percentage wise
 

I will likely need and get the full benefit this year. 🥳
 

OneEyedDiva said:
Exactly MJ !
Also I want to know will this take affect with the 2025 tax return? And since it's touted as an addition $6,000 why does it only add a few hundred dollars to the deduction? Seems like smoke and mirrors to me.
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It is my understanding that the $6,000 is not a deduction but more like an income exclusion, assuming you are at least 65 years old. In other words, if you are well into the 12% tax bracket, your tax burden will be reduced by $6,000 x 12%= $720. If you are in the 10% tax bracket your tax burden will be reduced by $6,000 x 10% = $600. Conversely, if your income is so low that you already do not pay federal taxes, the $6,000 income exclusion does nothing for you since you already pay no federal tax.

That last part, where poorer people gain no benefit is the rub for that group. But has been pointed out by many sources, that poorer group of people already benefit from other programs that the higher income seniors do not. I am not claiming a position one way or the other, only stating my understanding how the program works.
 
Since retiring in 2017, I stopped since 2018 submitting annual IRS returns simply because it is a nuisance even though my income with added interest earning has been slightly above thresholds. That is because what I would pay in is chump change with trivial penalties, the government won't bother with while there are vastly bigger fish in their pond to go after. Additionally, I strongly believe double taxing SS benefits, recent decades !@#$ politicians created are inherently WRONG.
 
Tom52 said:
It is my understanding that the $6,000 is not a deduction but more like an income exclusion, assuming you are at least 65 years old. In other words, if you are well into the 12% tax bracket, your tax burden will be reduced by $6,000 x 12%= $720. If you are in the 10% tax bracket your tax burden will be reduced by $6,000 x 10% = $600. Conversely, if your income is so low that you already do not pay federal taxes, the $6,000 income exclusion does nothing for you since you already pay no federal tax.

That last part, where poorer people gain no benefit is the rub for that group. But has been pointed out by many sources, that poorer group of people already benefit from other programs that the higher income seniors do not. I am not claiming a position one way or the other, only stating my understanding how the program works.
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subtracting a deduction of 6k from income is the same thing as a deduction as far as taxes but it’s diffe when something is based on agi

either way income is reduced by 6k .

however it’s a deduction because its after agi is added up to determine your phase out .

so in other words the 6k is not subtracted off income above the line before agi .

its a deduction taken after agi is calculated
 
mathjak107 said:
yeah , from American consumers

its no different than additional sales taxes
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Yep. $26.6 Billion comes to about $80 per person. $160 for a couple. $320 for a family of four. So you need to subtract that from whatever tax cut you got in the Big Beautiful Bill to get the true picture. And that's with most of the proposed tariffs coming later on.
 
Trade said:
Yep. $26.6 Billion comes to about $80 per person. $160 for a couple. $320 for a family of four. So you need to subtract that from whatever tax cut you got in the Big Beautiful Bill to get the true picture. And that's with most of the proposed tariffs coming later on.
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and they haven’t even been implemented yet for the most part
 
Trade said:
Yep. $26.6 Billion comes to about $80 per person. $160 for a couple. $320 for a family of four. So you need to subtract that from whatever tax cut you got in the Big Beautiful Bill to get the true picture. And that's with most of the proposed tariffs coming later on.
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That’s the reason that I bought my new car and everything else that I was going to need in the beginning of January before this administration took over. Now I don’t intend to buy anything but necessities for the next four years.
 
Sorry, for the sour grapes. but I've lived through a lot of " tax cutting legislation". Next year, we'll get a few crumbs. The year after that, maybe a crumb and a 1/2. Then after that, for some strange reason, it seems we're paying more taxes. While everybody is crowing about tax cuts, now; in 4 years, when this administration is long gone, there will be a huge tax hike.
Notice the operative word "temporary" in most of the tax act.
 
fuzzybuddy said:
Sorry, for the sour grapes. but I've lived through a lot of " tax cutting legislation". Next year, we'll get a few crumbs. The year after that, maybe a crumb and a 1/2. Then after that, for some strange reason, it seems we're paying more taxes. While everybody is crowing about tax cuts, now; in 4 years, when this administration is long gone, there will be a huge tax hike.
Notice the operative word "temporary" in most of the tax act.
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You know the old saying about never looking a gift horse on the mouth. I will gladly take whatever I am given. I don't know about you fuzzybuddy buy I may not even be alive in 4 years. I try to look on the bright side of life.
 
Whoops, I started a new thread and should have put it here. Oh, well. All I said in the other thread was it didn’t benefit me, but I am happy for those who do get a savings. (y)
 
Tom52 said:
It is my understanding that the $6,000 is not a deduction but more like an income exclusion, assuming you are at least 65 years old. In other words, if you are well into the 12% tax bracket, your tax burden will be reduced by $6,000 x 12%= $720. If you are in the 10% tax bracket your tax burden will be reduced by $6,000 x 10% = $600. Conversely, if your income is so low that you already do not pay federal taxes, the $6,000 income exclusion does nothing for you since you already pay no federal tax.

That last part, where poorer people gain no benefit is the rub for that group. But has been pointed out by many sources, that poorer group of people already benefit from other programs that the higher income seniors do not. I am not claiming a position one way or the other, only stating my understanding how the program works.
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Thank you for explaining that Tom. You made it easy to understand.
 
but remember it is a deduction, it is just an increased deduction for seniors .

so to see if you are over the income limit to get the full 6k deduction it is based on agi which includes no deductions , it’s strictly income .

i may not get much or anything because of my rmds

so in other words no deductions are included yet to see if you get anything because agi is based on pretty much income less a few select items
 
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Tom52 said:
You know the old saying about never looking a gift horse on the mouth. I will gladly take whatever I am given. I don't know about you fuzzybuddy buy I may not even be alive in 4 years. I try to look on the bright side of life.
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Yup, agreed, live for the moment.
But also, Congress giveth and taketh away.
 

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