How the New $6,000 Tax Deduction for Seniors Really Works
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
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You may have seen the recent statement released by the Social Security Administration, which suggested federal income taxes on Social Security benefits had been eliminated for most beneficiaries. While a $6,000 federal tax deduction for seniors was introduced as part of the new GOP tax bill, it does not eliminate taxes on Social Security. Instead, it offers targeted relief for lower- and middle-income Americans age 65 and older from 2025 through 2028.
READ THE ARTICLEMake Note: This deduction is in addition to the existing standard deduction, with income limits applying. So, what does this mean for you? While some will see a modest tax break, Social Security benefits are still taxable for many recipients, and that reality isn’t going away just yet.
Key Takeaways: This is a reminder of how essential it is to have a knowledgeable advisor who can cut through confusing headlines and help you plan proactively. As always, the conversation around Social Security taxes is more complex than it seems—and changes to the trust fund, solvency timelines, and future legislation are still on the table.