New Republican Tax Plan Includes Senior ‘Bonus’ Deduction

House Republicans have proposed a temporary $4,000 tax deduction for adults 65 and older as part of their new tax package, offering a less costly alternative to eliminating taxes on Social Security benefits. Framed as a “bonus,” the deduction would apply from 2025 to 2028 and phase out for higher earners—those making over $75,000 individually or $150,000 jointly. While the benefit may save middle-income retirees up to $500 annually, experts note it offers more modest relief compared to the previously suggested repeal of Social Security taxes, which would have largely benefited wealthier seniors. Analysts say this deduction is a more targeted and affordable approach, with an estimated cost of $200 billion over a decade, significantly less than the projected $1 trillion cost of eliminating taxes on Social Security benefits.

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