A New Tax Deduction for Seniors Could Make This the Right Year for a Roth Conversion
If you’re 65 or older, a new tax deduction that took effect in 2025 may open a planning window you didn’t have before. For qualifying individuals, it could make converting traditional IRA funds to a Roth IRA a tax-efficient move. And for some seniors, it might not cost anything extra at tax time.
The New Enhanced Deduction for Seniors
As part of the One Big Beautiful Bill Act, signed into law on July 4, 2025, eligible taxpayers age 65 and older can claim an additional deduction of $6,000 per person, or $12,000 for married couples filing jointly when both spouses qualify. This deduction stacks on top of the regular standard deduction and the existing extra standard deduction that seniors were already entitled to.
A few key things to know:
Available for tax years 2025 through 2028. It’s temporary, so the planning window is real but limited.
Accessible to both itemizers and non-itemizers. You can claim the standard deduction and still receive the full benefit.
Subject to income phase-outs. The deduction begins to phase out at a modified adjusted gross income (MAGI) of $75,000 for single filers and $150,000 for married couples filing jointly. It phases out completely at $175,000 and $250,000, respectively.
One note on terminology: This is a deduction, not a tax credit. A deduction reduces your taxable income, which in turn reduces the taxes you owe. The actual tax benefit depends on your marginal tax bracket.
Why This Can Create a Roth Conversion Opportunity
A Roth IRA conversion means moving money from a traditional IRA (where it will eventually be taxed on withdrawal) into a Roth IRA (where it can grow tax-free and be withdrawn tax-free in the future). The catch is that the amount you convert is treated as taxable income in the year you do it.
That’s where the new deduction becomes interesting. If you qualify for the full enhanced deduction — $6,000 as a single filer or $12,000 for a married couple — you effectively have up to that amount of additional “room” in your taxable income before your overall tax bill changes. In other words, a Roth conversion up to that amount could be offset by the new deduction, leaving your actual taxes roughly where they would have been without the conversion.
Think of it this way: The deduction lowers your taxable income. A Roth conversion adds to it. If the two roughly cancel out, you may be able to move money from a taxable account into a tax-free one without meaningfully changing your tax bill for the year.
Why Moving Money into a Roth Can Be Worth It
Traditional IRA funds haven’t been taxed yet. That means every dollar you eventually withdraw in retirement, or that your heirs inherit, will be subject to ordinary income tax. Roth funds, by contrast, grow tax-free and come out tax-free, as long as the account has been open for at least five years.
For people who expect their income — or tax rates in general — to be higher in the future, converting now can be a meaningful advantage. It also reduces the size of required minimum distributions (RMDs), which can push taxable income higher than retirees expect.
Is This Strategy Right for You?
Not everyone will benefit equally, and the math matters. A few factors worth considering:
Your current MAGI. If your income is already near or above the phase-out threshold, the deduction may be reduced or unavailable, which changes the calculus for a Roth conversion.
How much you plan to convert. The deduction creates room for a tax-efficient conversion up to the deduction amount, but larger conversions will add taxable income beyond that offset.
The time horizon. Roth conversions tend to make more sense when you have time for the converted funds to grow tax-free. A longer runway increases the potential benefit.
This particular window is open through 2028, which means there’s time to be deliberate, but not unlimited time. Working through the numbers with a financial advisor and a tax professional can help you decide whether a conversion makes sense this year, and for how much.
Want to Explore Whether This Makes Sense for You?
Parkshore Wealth Management works with individuals and families who want to use their money intentionally, including taking advantage of planning windows like this one when they make sense. We are fee-only and fiduciary, which means that we don’t earn commissions for the advice we give you and that your interests always come first.
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This material was written in collaboration with artificial intelligence (Claude) derived from sources believed to be accurate. This information should not be construed as investment, tax, or legal advice.
Parkshore Wealth Management is an independent, fee-only Registered Investment Advisor with offices in Granite Bay and Folsom, CA, and Lehi and Logan, UT. We partner with financially responsible individuals and families who are eager to take positive steps that will allow them to use their money to build the life they desire. The firm is led by Daniel Andersen, CFP®, a member of NAPFA, the country’s leading professional association of fee-only financial advisors.