Social Security

[GunnyGene]

While this may not lead to huge savings for us seniors at least it’s something for us. Seems like throughout my life government programs to save us money were always just out of reach. Rarely are there any considerations for the elderly and we do appreciate that the current administration included seniors in the BBB.

Personally, I think the IRS bean counters would just as soon like us old farts drawing SS or other .gov payments to just die already.

[Mags]

...
Has nothing to do with income source. It's an age deduction (for seniors) that gets added to the standard deduction.

In 2024 the standard deduction for Married/Joint return was $29,200.
The senior 'age' adder was $1150 per person. In 2025 the senior age adder is going to be $1600. This gets bumped to an additional $6K each if you and spouse fully qualify (there is an upper income limit).

For 2025-2028 years the new additional deduction can be claimed by seniors if the joint MAGI is less than $250K. There is a 'but' though. The $6K for each person is phased out between a joint MAGI of $150K and $250K.

Similarly for senior single filers. Phase out begins at $75k and ends at $175K

I'm probably as confused as everyone else about all this, so I'll wait until next year and let HRBlock figure it out.
...

Not that difficult. If you are a senior and your income is within the limitations then there is up to a $6k adder to the Standard Deduction per person.

[GunnyGene]

...
Has nothing to do with income source. It's an age deduction (for seniors) that gets added to the standard deduction.

In 2024 the standard deduction for Married/Joint return was $29,200.
The senior 'age' adder was $1150 per person. In 2025 the senior age adder is going to be $1600. This gets bumped to an additional $6K each if you and spouse fully qualify (there is an upper income limit).

For 2025-2028 years the new additional deduction can be claimed by seniors if the joint MAGI is less than $250K. There is a 'but' though. The $6K for each person is phased out between a joint MAGI of $150K and $250K.

Similarly for senior single filers. Phase out begins at $75k and ends at $175K

I'm probably as confused as everyone else about all this, so I'll wait until next year and let HRBlock figure it out.
...

Not that difficult. If you are a senior and your income is within the limitations then there is up to a $6k adder to the Standard Deduction per person.

I don't know how the IRS plans to implement this on the forms, but whether that $6k is subtracted from SS you get, which results in basically the same reduction in taxes owed as the 'adder' you mention, or applied to the Std. Deduction, it works out pretty much the same. Which is essentially chump change when it comes to your taxes owed, or a refund. If you pay in, say $2400 withholding, it's only going to make a couple hundred difference on the bottom line. My Std deduction is currently approx $16,500, so would become $22,500, and I'd get about a $300 refund instead of the $100 refund I got this past season. Whoopee for me. I guarantee I will not get a $6000 refund or even a $2400 refund.

[Mags]

...
I don't know how the IRS plans to implement this on the forms, but whether that $6k is subtracted from SS you get, which results in basically the same reduction in taxes owed as the 'adder' you mention, or applied to the Std. Deduction, it works out pretty much the same. Which is essentially chump change when it comes to your taxes owed, or a refund. If you pay in, say $2400 withholding, it's only going to make a couple hundred difference on the bottom line. My Std deduction is currently approx $16,500, so would become $22,500, and I'd get about a $300 refund instead of the $100 refund I got this past season. Whoopee for me. I guarantee I will not get a $6000 refund or even a $2400 refund.

Yup the $6000 is a deduction, not a refund. I won't see it since I 'Itemize Deductions'.

What helps me the most is that the SALT itemized deduction limitation was raised from $10,000 to $40,000.

[GunnyGene]

...
I don't know how the IRS plans to implement this on the forms, but whether that $6k is subtracted from SS you get, which results in basically the same reduction in taxes owed as the 'adder' you mention, or applied to the Std. Deduction, it works out pretty much the same. Which is essentially chump change when it comes to your taxes owed, or a refund. If you pay in, say $2400 withholding, it's only going to make a couple hundred difference on the bottom line. My Std deduction is currently approx $16,500, so would become $22,500, and I'd get about a $300 refund instead of the $100 refund I got this past season. Whoopee for me. I guarantee I will not get a $6000 refund or even a $2400 refund.

Yup the $6000 is a deduction, not a refund. I won't see it since I 'Itemize Deductions'.

What helps me the most is that the SALT itemized deduction limitation was raised from $10,000 to $40,000.

Not even a tax credit, which would be easier to understand, and possibly more lucrative. I suspect there will be a lot of very disappointed, and upset, people when they realize they ain't gettin' what they thought they would get.

[clovishound]

Yup the $6000 is a deduction, not a refund. I won't see it since I 'Itemize Deductions'.

What I read was that it could be stacked on top of itemized deductions. Look about halfway down the page to "What if I’m itemizing?".

https://www.aarp.org/money/taxes/what-t ... -2025.html

I ran mine through last year's return, subtracting the new deduction. If I understand it correctly, it will make about a $1400 difference in my tax burden.

[JVogler]

Had to pay $600 to IRS last year for taxes due. Hope I won't have to pay anything next year.

[BigAl52]

Old guys should be exempt from taxes period. I’ve paid my fair share

[GunnyGene]

One thing I'd add to this thread that hasn't been mentioned. I'd advise not making any changes to your withholding while this is in effect, unless it becomes permanent. There's also a potential for problems if a spouse passes away during this 'trial' period. Those of you that have lost a wife or husband in the past know that you have about 1 tax year to switch from filing joint returns to filing single returns. That has a significant effect, and this temporary additional deduction could make it more complicated and costly than it already is.

[Sir Henry]

This is a long read but explains how we got into the taxation mess. Specifically about halfway down it explains it. In 1983 a revision was made where only income above $32k was taxed. In 1983 few retired people (less than 10%) made more than $32K. The problem was it wasn’t tied to inflation and now most people make far more than that.

https://www.ssa.gov/history/taxationofbenefits.html

If they just raise the $32K up to what inflation has been and keep raising it the problem would be solved.

[GunnyGene]

This is a long read but explains how we got into the taxation mess. Specifically about halfway down it explains it. In 1983 a revision was made where only income above $32k was taxed. In 1983 few retired people (less than 10%) made more than $32K. The problem was it wasn’t tied to inflation and now most people make far more than that.

https://www.ssa.gov/history/taxationofbenefits.html

If they just raise the $32K up to what inflation has been and keep raising it the problem would be solved.

I'm not so sure about that. Seems to me you'd be creating an uncontrollable feedback loop.

[GFK]

This is a long read but explains how we got into the taxation mess. Specifically about halfway down it explains it. In 1983 a revision was made where only income above $32k was taxed. In 1983 few retired people (less than 10%) made more than $32K. The problem was it wasn’t tied to inflation and now most people make far more than that.

https://www.ssa.gov/history/taxationofbenefits.html

If they just raise the $32K up to what inflation has been and keep raising it the problem would be solved.

Thanks Sir Henry! Social Security seems like a nice idea. It seems like a way to provide something for those who did not or could not prepare for old age. Yet, to me, the main issue seems to be that Congress and/or the President do not control spending. How many of us could run a household, the way our federal government does? It seems that most states are able to control their spending (https://www.multistate.us/insider/2025/ ... tes-faring). Why not our federal government?

[Mags]

Yup the $6000 is a deduction, not a refund. I won't see it since I 'Itemize Deductions'.

What I read was that it could be stacked on top of itemized deductions. Look about halfway down the page to "What if I’m itemizing?".

https://www.aarp.org/money/taxes/what-t ... -2025.html

I ran mine through last year's return, subtracting the new deduction. If I understand it correctly, it will make about a $1400 difference in my tax burden.

That is good to know. The other articles I read didn't go that far.

[Sir Henry]

This is a long read but explains how we got into the taxation mess. Specifically about halfway down it explains it. In 1983 a revision was made where only income above $32k was taxed. In 1983 few retired people (less than 10%) made more than $32K. The problem was it wasn’t tied to inflation and now most people make far more than that.

https://www.ssa.gov/history/taxationofbenefits.html

If they just raise the $32K up to what inflation has been and keep raising it the problem would be solved.

I'm not so sure about that. Seems to me you'd be creating an uncontrollable feedback loop.

If your SS goes up 3% because of COLA the thread hole goes up the same. It’s actually quite simple.

[cpaspr]

I am a tax accountant. It's what I've done for the last 30 years. I've learned over the years to not even bother to look at what a bill promises until it is actually signed into law. Too many things change between the advertising and the signing.

I also started collecting Social Security benefits last month. Our income is such that we qualify for the entire $12,000 in extra deductions. I was going to have 10% withholding from my SSI, as that is what I determined would be needed under the 2024 tax law to cover the net tax increase. My wife does not have any withholding on her SSI, but once I started drawing, her monthly amount is supposed to rise to almost half of what I receive.

Once the BBB was signed into law, I looked into the effect for our particular situation. Between the increase in the basic standard deduction, the increase in the over-65 standard deduction, and the $6,000 income-limited-range additional senior deduction, I determined that where we owed $300ish fed and $900ish state for 2024, the numbers pretty much flip for 2025. So, basically, the additional deductions mean that even though our adjusted gross income goes up quite a bit, our bottom line taxes do not. So, though I had already set the 10% withholding into motion, it wasn't due to take effect till next month. I have subsequently changed it back to 0%.

[Hatchdog]

I am a tax accountant. It's what I've done for the last 30 years. I've learned over the years to not even bother to look at what a bill promises until it is actually signed into law. Too many things change between the advertising and the signing.

I also started collecting Social Security benefits last month. Our income is such that we qualify for the entire $12,000 in extra deductions. I was going to have 10% withholding from my SSI, as that is what I determined would be needed under the 2024 tax law to cover the net tax increase. My wife does not have any withholding on her SSI, but once I started drawing, her monthly amount is supposed to rise to almost half of what I receive.

Once the BBB was signed into law, I looked into the effect for our particular situation. Between the increase in the basic standard deduction, the increase in the over-65 standard deduction, and the $6,000 income-limited-range additional senior deduction, I determined that where we owed $300ish fed and $900ish state for 2024, the numbers pretty much flip for 2025. So, basically, the additional deductions mean that even though our adjusted gross income goes up quite a bit, our bottom line taxes do not. So, though I had already set the 10% withholding into motion, it wasn't due to take effect till next month. I have subsequently changed it back to 0%.

Great info cpaspr, thanks for sharing. I’m in the same boat kinda…my wife has no withholdings from her SS (she started before me) so I’m having 12% withheld from mine. May need/want to change that.

[GFK]

I am a tax accountant. It's what I've done for the last 30 years. I've learned over the years to not even bother to look at what a bill promises until it is actually signed into law. Too many things change between the advertising and the signing.

I also started collecting Social Security benefits last month. Our income is such that we qualify for the entire $12,000 in extra deductions. I was going to have 10% withholding from my SSI, as that is what I determined would be needed under the 2024 tax law to cover the net tax increase. My wife does not have any withholding on her SSI, but once I started drawing, her monthly amount is supposed to rise to almost half of what I receive.

Once the BBB was signed into law, I looked into the effect for our particular situation. Between the increase in the basic standard deduction, the increase in the over-65 standard deduction, and the $6,000 income-limited-range additional senior deduction, I determined that where we owed $300ish fed and $900ish state for 2024, the numbers pretty much flip for 2025. So, basically, the additional deductions mean that even though our adjusted gross income goes up quite a bit, our bottom line taxes do not. So, though I had already set the 10% withholding into motion, it wasn't due to take effect till next month. I have subsequently changed it back to 0%.

Maybe, Congress will make the change permanent?

[The Wiz]

Finally my appt arrived and I must say a very pleasant experience. I was expecting a DMV experience, even though I had an appointment, of waiting an hour or so for my number to be called. I checked in at 2:00, my appointment was at 2:30, got my number, and cracked open the book I brought and settled in. Two pages in my number was called, Sat down with Jessica, updated my records and was done. 5 minutes top. Total time from house and back was 47 minutes. I was amazed.

I want to say some other things about the Home Land Security guys there in full tactical but it would probably cross the line on site rules.