Are You 65 or Older? The New OBBB Senior Deduction Could Be Your Key to Tax Relief

If you’ve been feeling like the IRS has a “one-size-fits-all” approach to collections, 2026 finally brings some good news for seniors. The recently passed One Big Beautiful Bill (OBBB) has introduced a massive change that many retirees are completely overlooking: a brand-new $6,000 additional standard deduction specifically for those 65 and older.

For a married couple where both spouses are of age, that’s a whopping $12,000 off your taxable income before you even start counting your regular deductions. But here’s the secret that most tax prep software won’t tell you: this isn’t just about a bigger refund—it’s a powerful tool for tax settlement.

How it Changes the Game for Tax Debt

When we negotiate an Offer in Compromise (OIC) or a hardship-based payment plan, the IRS uses a formula to determine your “Reasonable Collection Potential.” They look at your income versus your “allowable expenses.” By increasing the senior standard deduction so significantly, the government has essentially acknowledged that seniors need more of their income to survive.

This change lowers your “disposable income” on paper. If you’re living on a fixed income in Boise or Missoula and struggling with a tax bill from years ago, this new law might be the “missing piece” that finally qualifies you for a settlement.

Don’t Settle for Yesterday’s Rules

Many tax relief firms are still using 2025 math. At Tax Relief Advisers, we’re already applying the OBBB standards to help our senior clients protect their social security and home equity. If you’re 65+, the “Ability to Pay” rules have shifted in your favor—let’s make sure you’re taking full advantage of it.