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Level 1
posted Aug 6, 2025 9:43:07 AM

RMD effect on Social Security taxation under big ugly bill

I need to be able to estimate my 2025 tax liability so I can understand how much to take as distribution from my IRA, particularly to limit my income to manage taxation on Social Security benefits.

 

With the many cahanges in this bill, it would seem that Seniors can reduce their AGI with the 'senior bonus'.  So it may be possible to increase my ira distribution and still have reasonable taxation of Social Security benefits.  But how much?

 

I have looked at the examples Turbo tax has provided but they do no come close to my situation and they do not address the effect of changes ontaxation of Social Secuty benenets 

 

Turbo tax needs to provide this information asap so Seniors can deide what to do!

0 1 319
1 Replies
Employee Tax Expert
Aug 6, 2025 10:21:59 AM

STEP 1 Using your 2024 software, make a copy/recreate your 2024 Tax Return.

STEP 2 Rename the copy as appropriate. 

STEP 3 One simple way to handle the effect of the Senior Bonus is to add $6,000 as an adjustment to income. Just to be clear, the above is only with the intent to obtain a reasonable estimate of your 2025 Tax Liabilities but it is NOT how the 2025 software will actually operate.

The "One Big Beautiful Bill" includes a senior bonus benefit, specifically a $6,000 additional standard deduction for individuals 65 and older, available to those with a modified adjusted gross income (MAGI) below $75,000 (or $150,000 for joint filers).

STEP 4  Enter your RMD to estimate your 2025 Tax Liability. Please bear in mind that this calculation is an estimate and you may be required to pay additional taxes. Should you overestimate your tax liability, then you will obtain a refund for the difference.

 The "One Big Beautiful Bill's" impact on RMDs:
  • RMD Age Changes: The bill, building upon previous SECURE Act legislation, further increases the RMD starting age. For those born between 1951 and 1959, the RMD age is 73. It's important to note that the bill ultimately aims to raise the RMD age to 75 for those born in 1960 or later, according to the National Society of Tax Professionals.

  • Potential Expansion of RMD Rules: While the bill doesn't directly change the current RMD requirements for Roth IRAs, it directs the Treasury Department to explore potentially expanding RMDs to Roth IRAs and large 401(k) balances in the future. 

ADDITIONAL TOOLS:

Tax Calculator 2024 

 
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