Taxation of Social Security benefits is a hot topic due to the One, Big, Beautiful Bill Act. A $6,000 deduction for individuals ($12,000 for couples) over 65 aims to reduce taxation on benefits, but many will still be taxed once they start collecting. Fidelity offers tips to save on Social Security taxes.

Up to 85% of Social Security benefits can be taxed based on household income. Individuals with income above $34,000 or couples above $44,000 may have up to 85% of benefits taxed. Lower income brackets may have 50% or 0% of benefits taxed. Understanding the rules can help reduce taxes.

Distributions from traditional IRA and 401(k) accounts are taxable. Dividends or stock gains are taxed at 15% or 20%. Roth IRA and 401(k) withdrawals are not taxed. Health savings accounts (HSAs) allow tax-free withdrawals for medical expenses. Strategic planning can reduce taxes on Social Security benefits.

Contributing to a Roth IRA or 401(k) can lower taxable income. Roth conversions involve paying taxes upfront but no taxes on withdrawals. HSAs offer tax-free withdrawals for medical expenses. Delaying Social Security benefits until 70 can increase payouts and reduce taxes. Optimal tax planning in retirement can lead to significant savings.

Read more at Yahoo Finance: How To Reduce Your Social Security Taxes, According to Fidelity