The household
A married couple, both 70, file jointly and live on withdrawals from their traditional IRAs; nothing else is on the return. The same couple is shown at three levels of withdrawals, $120,000, $200,000 and $260,000, and once more at $120,000 in 2029, the first year after the senior deduction’s window closes.
These inputs are one of the hand-computed cases in the simulator’s test suite. The page runs them through the same tax function the simulator uses each time it is built, and the test suite checks the results against the hand calculation, so the figures here and the simulator’s cannot drift apart.
The rule
For tax years 2025 through 2028, each person 65 or older may deduct $6,000, reduced by 6% of modified AGI over $150,000 on a joint return ($75,000 for other filers), and a married person must file jointly to claim it[1]. Each spouse’s deduction shrinks separately, so a couple loses 12% of every dollar over the line until both are gone at $250,000. It sits on top of the standard deduction and the long-standing additional deduction of $1,650 per married person 65 or older[2], neither of which phases out.
Four returns side by side
| Line | $120,000 | $200,000 | $260,000 | $120,000 in 2029 |
|---|---|---|---|---|
| AGI (IRA withdrawals) | $120,000 | $200,000 | $260,000 | $120,000 |
| Standard deduction | $32,200 | $32,200 | $32,200 | $32,200 |
| Additional deduction, two people | $3,300 | $3,300 | $3,300 | $3,300 |
| AGI over $150,000 | $0 | $50,000 | $110,000 | n/a |
| Phase-out per person (6% of the excess, at most $6,000) | $0 | $3,000 | $6,000 | n/a |
| Senior deduction, two people | $12,000 | $6,000 | $0 | expired |
| Taxable income | $72,500 | $158,500 | $224,500 | $84,500 |
| Federal income tax | $8,204 | $24,294 | $39,076 | $9,644 |
The bracket arithmetic for the middle case, slice by slice:
| Line | Rule applied | Amount |
|---|---|---|
| Pension and IRA withdrawals | $200,000 | |
| Adjusted gross income (AGI) | $200,000 | |
| Less standard deduction (married filing jointly) | Standard deduction, 2026 | −$32,200 |
| Less additional deduction for 2 people 65 or older | Additional standard deduction, $1,650 each | −$3,300 |
| Less senior deduction (2 people 65 or older) | Senior deduction and its phase-out | −$6,000 |
| Taxable ordinary income | $158,500 | |
| 10% on $24,800 of ordinary income | 2026 brackets (married filing jointly) | $2,480 |
| 12% on $76,000 of ordinary income | 2026 brackets (married filing jointly) | $9,120 |
| 22% on $57,700 of ordinary income | 2026 brackets (married filing jointly) | $12,694 |
| Tax on ordinary income | $24,294 | |
| Federal income tax | $24,294 |
What to notice
- Below $150,000 the couple keeps the full $12,000. An extra $1,000 of withdrawals there adds $120 of tax.
- Inside the phase-out the same $1,000 adds $246: the bracket rate on the dollar itself, plus that rate again on the 12% of deduction it takes away.
- At $260,000 the deduction is gone, and in 2029 it no longer exists at any income; the 2029 return at $120,000 owes $1,440 more than the same return in 2026. (The simulator holds 2026 dollar amounts in 2029 for this comparison; on a real 2029 return the other amounts would be indexed.)
What would change this
- Only one spouse 65 or older (ages 66 and 60): one additional deduction and one senior deduction, taxable income $80,150 and tax $9,122 at $120,000.
- Filing separately removes the senior deduction for both spouses, at any income.
- Qualified Roth withdrawals are not in AGI, so spending from a Roth instead of the IRA keeps more of the deduction.
Related
These examples show how the rules work. They are not financial, tax or investment advice. Real returns have details these examples leave out, so check the IRS instructions or ask a tax professional before you act. See the disclaimer.
Sources
- IRC §151(d)(5)(C): the senior deduction and its phase-out ↩
- IRS Revenue Procedure 2025-32: 2026 brackets, standard deductions and capital-gains bands ↩
Every threshold, rate and amount above is a figure the simulator uses. The sources page lists each one with its official source and the date we checked it, and the rule links in the tables go to the matching entry there.