Understanding the Standard Deduction Under the OBBBA: What New Yorkers Need to Know
- Jim O'Callaghan, CPA
- Nov 10
- 4 min read
The standard deduction isn’t just a line on your tax return — it’s one of the biggest factors in how much of your income actually gets taxed. With the One Big Beautiful Bipartisan Act (OBBBA) extending and expanding many provisions from the Tax Cuts and Jobs Act (TCJA), millions of taxpayers will see higher standard deduction amounts for the 2025 tax year (returns filed in 2026). That’s good news for most individuals and families across New York, especially those looking to simplify their returns and save money.
For residents of Queens, Long Island, and the surrounding New York area, understanding the changes can make a meaningful difference in how you plan and file your taxes.
Quick Snapshot for 2025:
Single or Married Filing Separately: $15,750
Married Filing Jointly or Qualifying Widow(er): $31,500
Head of Household: $23,625
Bonus Senior Deduction: Up to $6,000 (phases out at $75,000 single / $150,000 joint AGI)
What Is the Standard Deduction?
The standard deduction is a flat amount the IRS lets you subtract from your income before calculating your taxes. It’s designed to simplify the process so most taxpayers don’t have to itemize deductions like mortgage interest or charitable donations.
Instead of adding up expenses, you can take the standard deduction and instantly lower your taxable income. The result? A faster, simpler filing — and often, a smaller tax bill.
How the OBBBA Changed the Standard Deduction
On July 4, 2025, Congress enacted the One Big Beautiful Bill Act (OBBBA). Under this new law, the standard deduction has been increased for 2025 and continues to be indexed annually for inflation, ensuring it keeps pace with the cost of living. For the 2025 tax year (returns filed in 2026), OBBBA raises the standard deduction amounts and continues to index them for inflation each year.
Single or Married Filing Separately: $15,750
Married Filing Jointly or Qualifying Widow(er): $31,500
Head of Household: $23,625
In addition, seniors (age 65 or older) and taxpayers who are blind can claim an extra deduction — $2,000 if filing single or head of household, and $1,600 per qualifying individual for married filers. Each spouse may qualify separately, meaning a couple could receive up to $3,200 in additional deductions.
OBBBA also adds a temporary senior bonus deduction of up to $6,000 for qualifying seniors, which begins to phase out at AGI $75,000 (single) / $150,000 (joint). This bonus deduction is currently in effect for 2025–2028.
These updates make the standard deduction more valuable — especially for middle‑income households. The IRS has also published preliminary 2026 amounts reflecting continued indexing.
The Standard Deduction and New York Taxpayers
New York taxpayers often face higher state and local taxes, steep housing costs, and limited property tax deductions due to the federal SALT (State and Local Tax) cap. Because of that, fewer residents find it worthwhile to itemize.
Taking the larger standard deduction instead can streamline the process while still keeping overall tax liability low. This shift has especially benefited:
Homeowners whose itemized deductions no longer exceed the new standard deduction.
Renters and younger taxpayers who don’t have mortgage interest deductions to claim.
Seniors and retirees benefiting from the new senior bonus deduction and higher age-based adjustment.
Note: New York State’s tax code doesn’t always match federal deductions exactly, so it’s important to check whether the same standard deduction applies when filing your state return. TaxMaster’s team works with clients in Queens and Long Island to ensure both state and federal returns are filed accurately and advantageously.
Should You Still Consider Itemizing?
Itemizing can still make sense if your deductible expenses exceed the standard deduction amount — for example, if you have large medical costs, significant charitable donations, or high mortgage interest payments.
However, for most taxpayers, the standard deduction now offers greater savings with less paperwork. The key is to review both options before filing. A professional tax preparer can run both scenarios to ensure you’re choosing the approach that saves you the most.
How to Maximize Your Tax Savings
Even with the higher standard deduction, there are still smart strategies to lower your overall tax burden:
Contribute to retirement accounts like a 401(k) or IRA to further reduce taxable income.
Claim all eligible credits, such as the Child Tax Credit or energy efficiency credits for home improvements.
Stay organized year-round with accurate records for medical, education, and childcare expenses — just in case itemizing makes sense next year.
Remember, while the standard deduction helps reduce taxable income, tax credits directly reduce the amount of tax you owe — meaning you can often combine both strategies for even greater savings.
File Confidently with TaxMaster
The updated standard deduction is a win for simplicity and savings, but every taxpayer’s situation is unique. We understand that tax changes can be confusing — you don’t have to navigate them alone. With decades of experience in New York tax preparation and planning, TaxMaster helps individuals and businesses across Queens and Long Island understand how new tax laws like the OBBBA affect their bottom line.
Our licensed preparers stay current with IRS and state updates year-round to ensure you get every deduction and credit you’re entitled to.
Glendale Office: 718-326-0500
Melville Office: 631-673-0617
Frequently Asked Questions
What is the main benefit of the standard deduction?
It simplifies filing and instantly reduces your taxable income without having to track itemized expenses.
Can I still itemize if I want to?
Yes. Taxpayers can always choose the greater of the two options — standard or itemized — depending on which saves more.
Will the standard deduction change again next year?
Most likely. The OBBBA ties the deduction to inflation, so annual increases are expected to continue in future tax years.