[Event] Ask the Experts: Tax Law Changes - One Big Beautiful Bill

The One Big Beautiful Bill (OBBB) does NOT make any changes to how social security is taxed.  Rather, the OBBB provides a new, temporary deduction for individuals aged 65 and older. This deduction is $6,000 per eligible individual ($12,000 for a married couple where both spouses qualify). This is in addition to the standard deduction already available to seniors, and is available for taxpayers age 65 or older that do not  exceed the income thresholds (the additional deduction begins to phase out when Modified Adjusted Gross income exceeds $75,000 for single files, or $150,000 for married couples filing jointly).  Note that this new deduction for seniors is a temporary provision, effective for tax years 2025 through 2028.

So, how do you determine how much of your social security is taxable?  Generally speaking, you take half of your social security benefits and all your other taxable income and add them together. Your social security will start to become taxable if:

• You are filing single, head of household, or qualifying surviving spouse and the above amount is more than $25,000.
• You are filing jointly, and the above amount is more than $32,000.

• You are married, filing separately, and the above amount is more than zero (more than $25,000 if you lived apart from your spouse for all of the year).

If you are above the thresholds listed, then you would have to complete an IRS worksheet to determine how much of your social security is taxable - knowing that up to 85% of your benefits could be taxable. The IRS has a worksheet which can be found on page 7 of IRS Publication 915 that you can use to determine how much of your benefits would be taxable. You can find that publication at this link:  IRS Publication 915 

So, grab a pencil and a calculator, and head to IRS Publication 915 to use the worksheet provided to enter your estimated income for the year and determine how much of your social security will be taxable to you.