What year‑end planning strategies legitimately reduce MAGI to preserve the full senior bonus deduction for 2025?

1. Harvest investment losses and manage capital gains to keep AGI down

Selling underperforming securities to realize capital losses can offset capital gains that would otherwise push AGI (and thus MAGI) above the phaseout threshold; multiple practitioner guides explicitly recommend “harvesting” losses or deferring gains as a straightforward year‑end tactic to protect the senior deduction ^{[5] [6] [7]}. Conversely, avoid recognizing large capital gains late in the year if doing so risks entering the phaseout band—several advisory firms list this as a primary lever for retirees with sizable portfolios ^{[8] [9]}.

2. Defer retirement account withdrawals and time RMDs where possible

Because traditional retirement distributions count toward AGI, deferring withdrawals (when permitted) or delaying non‑required distributions can preserve MAGI under the phaseout threshold; tax advisers recommend evaluating the timing of RMDs and discretionary IRA/401(k) distributions as part of year‑end planning ^{[9] [2]}. For taxpayers facing RMDs who also give charitably, qualified charitable distributions (QCDs) can satisfy RMDs without increasing MAGI in the same way a taxable distribution would, a tactic noted as helpful in keeping seniors below phaseouts ^{[10] [7]}.

3. Use above‑the‑line contributions (IRA, HSA) and similar adjustments

Making deductible, above‑the‑line contributions—such as deductible traditional IRA contributions (if eligible) or HSA deposits—reduces AGI directly, and therefore MAGI for the senior deduction; practitioners explicitly list stacking above‑the‑line deductions as a tool to reclaim or protect the deduction ^{[9] [11]}. These moves have limits and eligibility rules, so their utility depends on a taxpayer’s specific retirement‑plan coverage and income situation ^[12].

4. Avoid or delay Roth conversions and other moves that spike AGI

Advisers warn that Roth conversions and other taxable accelerations can increase AGI and therefore cost seniors the deduction; a Roth conversion that is taxed in 2025 could both raise current tax and push MAGI into or through the phaseout, so cautious timing or spreading conversions over years is recommended ^{[2] [10]}. That caution is echoed across planning guides as a common pitfall for taxpayers near the thresholds ^[8].

5. Charitable planning nuance: QCDs help with MAGI but itemized gifts do not

Qualified charitable distributions from IRAs are highlighted as especially useful because they satisfy RMD obligations without increasing MAGI, while cash charitable deductions claimed on Schedule A don’t reduce MAGI for this calculation—meaning standard charitable giving won’t lower MAGI the same way a QCD can ^{[10] [7]}. Advisors recommend integrating QCDs when older taxpayers both want to give and protect the senior deduction.

6. Practical constraints, tradeoffs and when to seek professional modeling

The senior deduction is temporary (2025–2028) and its phaseout mechanics (6% reduction of excess MAGI) create fine‑margin tradeoffs—minor income timing can change the deduction materially—so careful modeling of projected AGI/MAGI, RMD timing, capital gains/loss harvesting and Roth strategies is essential; many firms urge working with a preparer to weigh present‑year tax, future tax trajectory, and non‑MAGI consequences ^{[11] [2] [9]}. Note that MAGI for this purpose adds back only specific excluded foreign incomes for most taxpayers, so offshore income issues are a separate complexity for expats ^{[3] [4]}.

This summary relies on practitioner and firm guidance collected after the OBBBA’s enactment and reflects planning techniques repeatedly recommended—harvest losses, defer taxable distributions, use QCDs and above‑the‑line contributions, and avoid one‑time AGI spikes like Roth conversions—while acknowledging limits and the need for individualized modeling ^{[6] [9] [2]}.