By Naveen Athrappully

Senior citizens stand to benefit financially in the 2026 tax season thanks to provisions from the One Big Beautiful Bill (OBBB) Act, nonprofit advocacy AARP said in a statement on Jan. 15.

OBBB, signed into law by President Donald Trump in July 2025, “increased inflation adjustments for the standard deduction, and a new bonus senior deduction will allow tens of millions of seniors to save hundreds of dollars on their taxes this year,” AARP said.

For 2026 tax filings, the standard deduction is $15,750 for single filers and married individuals filing separately, according to the IRS. This is $1,150 higher than the $14,600 deduction in tax year 2024.

Heads of household can get a standard deduction of up to $23,625, up from $21,900. For married couples filing jointly, the deductible amount is $31,500, up from $29,200, the agency said.

OBBB also instituted a $6,000 deduction for seniors aged 65 and above, effective 2025 through 2028.

“This is in addition to the standard deduction for seniors available under existing law,” the IRS said.

For married couples, this bonus deduction can go up to $12,000. The deduction phases out for taxpayers whose modified adjusted gross income exceeds $75,000 individually or $150,000 when filing jointly, it said.

Another provision that could benefit seniors is an exemption from tax on car loan interest. Individuals who buy a vehicle for personal use using a loan that originated after Dec. 31, 2024, may deduct the interest paid on such loan, effective 2025 through 2028, according to the IRS. The maximum allowed deduction is $10,000.

Seniors who may still be working can benefit from OBBB’s provisions on tips and overtime payments.

Starting tax year 2025, taxpayers can deduct qualified tips they receive if they work in occupations the IRS deems to have been “customarily and regularly receiving tips” prior to Dec. 31, 2024. A maximum deduction of $25,000 is available under this provision.

As for overtime payments, taxpayers can deduct a portion of such qualified pay, with the maximum allowable deduction for single filers set at $12,500.

For both tips and overtime pay, the deductions begin to phase out once the modified adjusted gross income exceeds $150,000 for single filers and $300,000 for joint filers.

“This year’s tax season is bringing meaningful financial relief to older Americans,” AARP Executive Vice President Nancy LeaMond said.

The bonus deduction “is targeted to lower- and middle-income retirees and will help tens of millions keep more of their income. With ongoing anxiety around cost of living and kitchen table budget issues, this kind of relief can make a critical difference for folks trying to make ends meet,” LeaMond said.

AARP published the statement with less than two weeks to go before the start of the 2026 tax filing season.

The IRS said the season will kick off on Jan. 26, with taxpayers having until April 15 to file their returns and pay their taxes.

According to the IRS, it is projected to receive around 164 million individual income tax returns this season, with most filings expected to be made electronically.

IRS Chief Executive Officer Frank Bisignano said the agency was “ready to help taxpayers meet their tax filing and payment obligations during the 2026 filing season.”

“As always, the IRS workforce remains vigilant and dedicated to their mission to serve the American taxpaying public. At the same time, IRS information systems have been updated to incorporate the new tax laws and are ready to efficiently and effectively process taxpayer returns during the filing season,” Bisignano said.

Meanwhile, AARP said in its statement that older Americans have been financially squeezed. It cited a 2025 survey that showed 74 percent of adults believe they won’t be able to afford to live independently as they age.

More than 70 percent believe their investments could be wiped out by a bad economy or a recession, while 80 percent are concerned that Social Security won’t be available to them when they need it.

In June 2025, advocacy group The Senior Citizens League (TSCL) said an estimated 21.8 million senior citizens in the country were making ends meet solely on Social Security income.

“Almost two-thirds of seniors who completed the survey said they were dissatisfied with the amount they receive from their monthly Social Security checks,” TSCL said.

Nearly all survey participants said reforming Social Security and Medicare should be a top priority of Congress and the federal government.