The Big Beautiful Breakdown—How the New Bill Affects Retirees

The Big Beautiful Bill provides key tax protections and opportunities for retirees, especially around estate planning, deductions, and some newer benefits.

 1. Estate & Gift Tax Exemption Permanently Increased

You can now transfer up to $15 million per person (or $30 million per couple) tax-free — for life or after death.

• Adjusted yearly for inflation
  
  

• Applies to lifetime gifts AND estate transfers
  
  

• Permanent rule
  
  

 Example: A couple with $28 million in assets can pass it all to their heirs without paying federal estate taxes.

 2. Mortgage Interest Deduction Continues (Permanent)

Still paying a mortgage in retirement?
You can deduct interest on up to $750,000 of home loan principal — whether it’s your primary or secondary home.

• Permanent rule
  
  

• Does not apply to reverse mortgage interest (unless repaid)
  
  

 Tip: Keep track of mortgage statements — your lender reports deductible interest.

 3. SALT Deduction Cap Raised to $40,000 (2025–2030)

The cap on state and local tax deductions (property, income, or sales taxes) is now:

• Up to $40,000 annually
  
  

• Good through 2030
  
  

• Great for retirees in high-tax states
  
  

 Tip: Track property tax and state income tax to claim full benefit.

 4. Car Loan Interest Deduction (2025–2030)

Finance a new car? You can deduct up to $10,000 per year in loan interest if the car:

• Is assembled in the U.S. and New
  
  

• Is for personal use (not business)
  
  

• Your income is below certain limits (phases out starting around $150,000 MAGI)
  
  

 Tip: Include the car’s VIN and interest details on your return to qualify.

 5. $6,000 Senior Deduction (2025–2028)

Extra deduction just for being 65+:

• $6,000 for individuals
  
  

• $12,000 for married couples (both age 65+)
  
  

• On top of your standard deduction
  
  

• Available from 2025–2028
  
  

 Who Qualifies:

• You or your spouse must be 65 or older by year-end
  
  

• Must have a valid Social Security number
  
  

• File jointly to claim the full $12,000 (if married)
  
  

 Income Phaseout:

• Phases out at 6% of the amount over:
  
  

  • $75,000 (single)
    
    

  • $150,000 (married filing jointly)
    
    

• Fully phased out above roughly $175,000 (single) or $275,000 (joint)
  
  

 Examples:

• Barbara (68, earns $65K) → gets full $6,000 deduction
  
  

• John & Mary (both 67, earn $62,500) → get full $12,000 deduction
  
  

 FAQs for Retirees

Q: Does the estate tax exemption apply to gifts I make while living?
A: Yes — you can gift up to the full $15M/person limit during your lifetime without triggering gift taxes.

Q: Can I deduct interest on a reverse mortgage?
A: Not usually — that interest isn’t deductible until it’s paid, typically when the loan is settled.

Q: How do I deduct car loan interest?
A: Include the loan interest amount and vehicle VIN on your tax return. Make sure your income is under the threshold.

 Retirement Tax Planning Tips

•  Review your estate plan regularly — especially if your wealth exceeds $5 million
  
  

•  Track mortgage, state/local taxes, and gifts to maximize deductions
  
  

•  Plan major purchases (like a new car) around income thresholds to qualify for more breaks

Contact us TODAY at https://hackyourtax.com/ to see how you can benefit from tax planning and maximize your income!