How the TCJA and OBBBA Changed Itemized Deductions, and Why Seniors Might Come Out Ahead
If you've been frustrated about no longer deducting charitable donations, medical bills, or other expenses on your taxes, you're not alone. Many taxpayers—especially retirees—have said, "I can't deduct anything anymore!"
But here's the truth: you probably haven't lost anything at all. In fact, due to changes under the Tax Cuts and Jobs Act (TCJA) and the more recent One Big Beautiful Bill Act (OBBBA), you may actually be receiving a larger deduction without the added complexity of itemizing.
How the TCJA Changed Itemized Deductions
Before 2018, many taxpayers itemized their deductions to claim tax benefits for:
Charitable donations
Mortgage interest
State and local taxes (SALT)
Medical expenses
Miscellaneous deductions (e.g., tax preparation fees, investment fees)
Key changes under TCJA:
The standard deduction was nearly doubled
Miscellaneous itemized deductions were suspended
SALT deductions were capped at $10,000
The threshold for medical expense deductions was adjusted
Result: The vast majority of taxpayers no longer need to itemize because the standard deduction now offers a higher benefit for many households.
The OBBBA and the New Senior Deduction (Effective 2025)
The One Big Beautiful Bill Act (OBBBA) introduces an additional deduction designed to benefit older taxpayers:
The Senior Deduction
$6,000 additional deduction per taxpayer age 65 or older
Available whether you take the standard deduction or itemize
Scheduled to apply from 2025 through 2028
Phases out starting at $75,000 for single filers and $150,000 for married couples filing jointly
This means that an eligible married couple could claim up to $12,000 more in deductions.
Why Some Taxpayers Feel They've "Lost" Deductions
We often hear this concern: "I used to deduct my donations, mortgage, and state taxes. Now I can’t."
However, in many cases, the numbers show a different story:
Before TCJA:
Itemized deductions: Approximately $14,000 (charitable giving, mortgage interest, and SALT combined)
Under TCJA and OBBBA (2025):
Standard deduction: $31,500 (married filing jointly, projected)
Additional standard deduction for age 65+: $3,100
Senior deduction (if both spouses are eligible): $12,000
Total deduction: $46,600, even without itemizing
This example illustrates that many taxpayers are receiving a larger deduction than before, with less complexity.
How the Senior Deduction May Help with Social Security Taxation
While the senior deduction does not alter how Social Security benefits are calculated or taxed, it can reduce your overall taxable income. Lower taxable income may help some retirees remain below the thresholds that determine how much of their Social Security benefits are taxable.
Please note: The inclusion of Social Security benefits in taxable income is based on IRS-defined provisional income thresholds. The senior deduction affects taxable income, but not Adjusted Gross Income (AGI) or provisional income.
When Itemizing Still Makes Sense
There are situations where itemizing deductions may still be beneficial:
You pay significant mortgage interest
You make substantial charitable contributions
You reside in a high-tax state and can take advantage of the higher SALT deduction cap under OBBBA
You have unusually high medical expenses that exceed applicable AGI thresholds
Remember: The senior deduction applies whether or not you itemize.
Frequently Asked Questions
Do I still need to itemize to deduct donations?
No. With the expanded standard and senior deductions, many taxpayers receive greater benefit without itemizing.
Does the senior deduction affect my AGI?
No. The senior deduction reduces your taxable income, but not your Adjusted Gross Income or provisional income.
Can the senior deduction lower the tax on my Social Security?
Indirectly, yes. By lowering your taxable income, it may help reduce or eliminate how much of your Social Security is included as taxable income.
Is the senior deduction permanent?
No. The deduction is scheduled to apply for tax years 2025 through 2028, unless extended by future legislation.
Should I still bring in my mortgage interest, property tax, and charitable donation records?
Yes. Even if you usually take the standard deduction, we recommend providing all potential deduction-related documents each year. This allows us to determine whether itemizing or taking the standard deduction—including the senior deduction if applicable—is more beneficial for your unique tax situation.
Summary
Just because you're not itemizing doesn't mean you're losing deductions.
In fact, due to TCJA and the OBBBA:
Many taxpayers are receiving a larger overall deduction
Filing has become simpler and more streamlined
Eligible seniors may benefit from additional deductions that reduce or eliminate federal tax liability on other income sources
How We Help You Maximize Every Deduction
When we prepare your tax return, we don’t just fill in the forms — we analyze whether itemizing or taking the standard deduction will provide the best outcome for you. And if you’re 65 or older, we ensure you receive every additional deduction you're eligible for, including the new senior deduction under OBBBA (when applicable).
This review happens automatically during our process, so you can feel confident you're not leaving money on the table.
Next Steps
Understanding how these deductions apply to your unique situation is critical. Tax outcomes vary depending on individual income, filing status, and other financial circumstances.
Contact us to schedule a personalized tax planning session. We’ll help you determine whether the standard deduction, itemizing, or a strategic combination delivers the most benefit for your household.
Disclosures: This communication is for informational purposes only and should not be construed as tax, legal, or financial advice. Please consult with a qualified tax advisor or financial professional before making decisions based on this information. Tax laws and interpretations are subject to change. The availability of deductions and their impact on your individual tax situation may vary.