65 or Older? Cut Your Tax Bill Before the Clock Runs Out

The One Big Beautiful Bill that Congress passed last summer made a number of wide-ranging changes to tax law — some permanent, some temporary.

But a few provisions are especially relevant for anyone in or near retirement. In particular, Americans age 65 and older are eligible for an extra $6,000 deduction. (Married couples filing jointly get an extra $12,000 deduction if both spouses are at least 65.)

The window of opportunity for that added deduction is limited, though. It goes away after 2028, so you have a few short years to take advantage of it. Also, not everyone qualifies because the deduction has income limits. It begins being phased out for individuals whose income is more than $75,000 and couples with an income of $150,000.

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What are some ways you can get the most out of this extra $6,000 deduction?

One possibility: If you've thought about doing a Roth conversion, but never advanced past the thinking stage, now might be the time to act.

The right time for a Roth

You may already know Roth accounts grow tax-free and aren't taxed when you withdraw money from them. That's different from traditional IRAs and 401(k) accounts, where you defer paying taxes on your contributions to them. The tax comes due when you start withdrawing the money in retirement.

This is why many people convert to a Roth. You do pay taxes when you move your money from the tax-deferred account to the Roth because that money is counted as ordinary income. But once the money is in the Roth account, it is no longer subject to taxes.

With Roths, you also don't have required minimum distributions (RMDs), where the IRS forces you to withdraw a certain percentage of your money each year once you reach age 73 (age 75 for those born in 1960 or later).

And that brings us back to why now could be a great time to make a Roth conversion.

That extra deduction for older people will lower your tax bill — but only for the next few years. Why not use that cushion to make the Roth conversion while you can?

As an example, consider a married couple, both 65, whose modified adjusted gross income (MAGI) is $100,000. They have $50,000 of wiggle room before they begin to hit the phase-out for the deduction for older people. Since they each get an extra $6,000 deduction, their combined extra deduction is $12,000.

If the couple has a sizable amount of money in tax-deferred accounts, which is common, they are prime candidates for a Roth conversion. The extra $12,000 deduction could essentially offset the first $12,000 they move to a Roth.

That would continue to be the case each year until the extra deduction for older people expires.

Putting the money in the Roth comes with several advantages. They avoid future RMDs. The tax they pay on the conversion would be less than they would pay in the future.

Plus, the tax would also be less than a surviving spouse or a beneficiary would pay in the future if they inherited a deferred-tax account.

Potential Social Security impact

A Roth conversion is not the only thing the extra deduction could help with.

For someone who is 65 and hasn't claimed their Social Security benefit yet, the deduction could give them leeway in delaying Social Security a little longer, which would increase the amount of their monthly benefit payment.

While full retirement age is 66 or 67 for most people these days, you can claim Social Security as early as age 62, although at a reduced amount. Delay claiming, though, and your benefit increases 8% each year until you are 70.

How does the extra tax deduction for older people help here?

Instead of claiming Social Security right away, a retiree could postpone claiming the benefit and withdraw more from their other investments to cover their living expenses. The deduction for older people would help offset at least some of the taxes they would pay on their withdrawals.

Meanwhile, their Social Security benefit would continue to grow 8% annually until they are ready to claim it.

Standard deductions and charitable giving

Another tax change that the OBBB brought about is that people can now claim a deduction for charitable giving even if they are taking the standard deduction.

Previously, only taxpayers who itemized their deductions could lower their tax bills through their gifts to charity.

Beginning in tax year 2026, the new rule allows those who use the standard deduction to claim up to $1,000 of charitable giving if they are single and $2,000 if they are a married couple filing jointly. Unlike the age 65-plus deduction, which eventually sunsets, this is a permanent change.

This also means those who are 65 and older can really add up their deductions over the next few years. For tax year 2026, the standard deduction will be $32,200 for a couple filing jointly.

If both spouses are at least 65, the $12,000 deduction is added to that. Then add $2,000 for charitable deductions, and the couple's standard deduction would be $46,200.

It's clear there's plenty to consider as you sort through how the current tax situation and changes brought about by the OBBB affect you. A financial professional can help you review the options and determine what's best for your circumstances.

But remember, the clock is ticking on some options. Don't miss the opportunity to lower your tax bill.

Ronnie Blair contributed to this article.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

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