Category: Retirement & Social Security → Tax Updates for Seniors
🧾 Quick Answer
No — the new legislation does not repeal federal taxation of Social Security. Instead, it introduces a **temporary $6,000 deduction per senior age 65+** (or $12,000 for couples) through 2028, which can reduce overall taxable income.
📊 How the Deduction Works
- 📆 Available from tax year 2025 through 2028
- 🧑💼 $6,000 deduction for individuals 65+
- 👫 $12,000 total for married couples where both are 65+
- 💰 Deduction applies to total taxable income—not just Social Security
💡 Income-Based Impact
🔻 Lower-Income Seniors (AGI under $35K single / $50K joint)
- Already pay little or no tax on Social Security
- May see little benefit from the new deduction
🔸 Moderate-Income Seniors (AGI $60K–$150K)
- Will benefit the most from the deduction
- May reduce or eliminate taxes on Social Security if combined with retirement income
🔺 Higher-Income Seniors (AGI $150K+ or with large IRA/401(k) withdrawals)
- Deduction begins to phase out at $150K joint / $75K single
- Fully phases out at $250K joint / $175K single
- Most or all of Social Security may still be taxed at up to 85%
- Major IRA/RMDs, capital gains, and real estate income reduce eligibility
📉 What Doesn’t Change
- 📥 Social Security remains taxable under existing rules (up to 85%)
- 🧾 Income thresholds for taxing Social Security are unchanged
- 💳 You must still report retirement account withdrawals and interest income
📌 Planning Tip for Members with Retirement Income
If you are receiving large distributions from:
- 401(k), IRA, or SEP accounts
- Pensions or annuities
- Dividends or real estate income
— you may want to coordinate withdrawals or shift investment income across years to remain under deduction phase-out thresholds. Ask our team about Roth conversions, QCDs (qualified charitable distributions), or other tax strategies that keep your AGI below $150K.
⚠️ This deduction is temporary. It expires after the 2028 tax year unless extended by future legislation.
✅ Gbooks Can Help You Maximize the Deduction
Our team can:
- Run a deduction impact estimate across AGI scenarios
- Structure retirement withdrawals to minimize taxation
- Apply the deduction properly in your return and track documentation in Zoho
🔐 Don’t Have an IRS Account?
Creating a secure IRS.gov account helps you monitor your Social Security benefits, tax payments, and transcripts online without long wait times.
📎 Learn how to set yours up:
👉 How to Set Up Your IRS.gov Account
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