Pure’s Tax Planner, Juliana Fulop, breaks down how the One Big Beautiful Bill Act could impact your taxes and what steps you can take now to prepare. She also shares key insights to help you make informed financial decisions before year-end.
Transcript
Big changes may be coming to your federal tax return starting in the 2025 tax year. The One Big Beautiful Bill Act includes two major provisions: a new tax break for seniors and a significant increase to the state and local tax (or SALT) deduction. If you are 65 or older, or you live in a high-tax state, these changes could directly affect you.
Beginning this year, taxpayers 65 or older may receive an additional tax exemption of $6,000 per person. This exemption is in addition to your standard or itemized deduction, which will help lower your taxable income. To qualify, your modified adjusted gross income (called MAGI) must be under $150,000 for married filing joint or surviving spouse filers, and $75,000 for other filing statuses. Married Filing Separate is not eligible. As your income exceeds these thresholds, you will begin to phase out. The senior tax exemption is set to expire in 2028, unless extended.
Also, the $10,000 cap on SALT state and local tax deductions will increase to $40,000 if your MAGI is less than $500,000 (or $20,000 and $250,000 if Married Filing Separately). If income exceeds these limits, you are subject to a phaseout. If you live in a high income and property tax state, it might make sense to itemize, especially if you can bunch your deductions to take full advantage. This increase is set to expire in 2029 unless extended.
If you’re a senior and don’t itemize you can claim an additional standard deduction of $1,600 per person for married filing joint or $2,000 for most other filers.
In short, seniors get a new deduction boost, and those that itemize may receive a bigger break on state and local taxes. Of course, both come with eligibility rules and phase-outs so reach out to your Pure advisor or schedule a free tax assessment.
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