Social security taxes

[Joanne27]

What kind of deduction can we expect if there’s no tax on social security benefits? 

[xmasbaby0]

Why do you think there is no tax on Social Security?   There is a lot of misunderstanding out there----your Social Security is taxable income if you have enough other income from other soruces.  That has not changed.   Tax on SS has not been eliminated by the new tax laws.

Up to 85% of your Social Security benefits can be taxable on your federal tax return.  There is no age limit for having to pay taxes on Social Security benefits if you have other sources of income along with the SS benefits.  When you have other income such as earnings from continuing to work, investment income, pensions, etc. up to 85% of your SS can be taxable. 

 What confuses people about this is that before you reach full retirement age, if you continue working while drawing SS, your benefits can be reduced if you earn over a certain limit. (For 2021 it was  $18,960.  For 2022 it was  $19,560  —  for 2023 $21,240)  For 2024, $22,320.  For 2025 it will be $23,400

After full retirement age, no matter how much you continue to earn, your benefits are not reduced by your earnings; your employer will still have to withhold for Social Security and Medicare.  If you work as an independent contractor then you will pay self-employment tax for Social Security and Medicare.

To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2024 Form 1040

https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable

You need to file a federal return if half your Social Security plus your other income is

Single or Head of Household      $25,000

Married Filing Jointly                  $32,000

Married Filing Separately            $0

Some additional information:  There are 9 states that tax Social Security—Colorado, Connecticut,, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont  and West Virginia These states offer varying degrees of income exemptions, but two mirror the federal tax schedule: MN and VT.

IF YOU WANT TO HAVE TAX WITHHELD FROM YOUR SOCIAL SECURITY BENEFITS

https://www.ssa.gov/manage-benefits/request-withhold-taxes

https://www.irs.gov/forms-pubs/about-form-w-4-v

[VolvoGirl]

Nothing about Social Security has changed. It can still be taxable. There is a new Enhanced Deduction for Seniors of $6,000 for each spouse 65 or older if you qualify. The income limit is 75,000 (150,000 Joint). That is listed separately on your return and is in addition to the Standard Deduction or your Itemized Deductions and is after any Social Security taxable amount on line 6b. The deduction for seniors will be allowed for 4 years, from 2025 through 2028.

For Single the Deduction phases out at 175,000
For Joint the Deductions phases out at 250,000

See draft of 1040 Schedule 1-A page 2 part V
https://www.irs.gov/pub/irs-dft/f1040s1a--dft.pdf

Sch 1-A line 31 starts with your MAGI from line 3, which is the AGI on 1040 line 11b plus any income from form 2555 lines 45 & 50 plus form 4563 line 11.