Trump bill includes $6,000 boost to senior citizens' standard deduction, potentially accelerating Social Security insolvency.
President Trump’s sweeping domestic policy bill passed by the House includes a $6,000 boost to senior citizens’ standard deduction from 2025 through 2028. The new temporary tax break is for individuals and couples age 65 and older, phasing out for those with incomes above $75,000 ($150,000 for couples). This provision, not a cut in the Social Security tax, could accelerate Social Security and Medicare insolvency by a year, to 2032. Most lower-income seniors won’t benefit from the new deduction due to insufficient tax liability, while higher-income seniors stand to gain the most.
Taxation of Social Security benefits is a concern for many seniors, with about 40% of beneficiaries having to pay federal income taxes on their benefits. Income thresholds determine the percentage of benefits subject to taxation, with potential surprise tax bills for those unaware of the rules. The new temporary deduction may provide tax relief for middle-income retirees but could exclude higher-income retirees already receiving RMDs and Social Security. Most Social Security recipients do not pay taxes on their benefits, which are a vital source of income for many older adults.
Read more at Yahoo Finance: Trump bill includes additional $6,000 deduction