2025 / NEW TAX BREAK FOR SENIORS
LES AND ALEX: https://youtu.be/43t_22xn3RE?feature=shared
Key Points
- What is the Senior Tax Deduction?
- A new deduction created as a workaround to reduce taxes on Social Security benefits.
- Part of the bill passed in July.
- Amount:
- $6,000 for individuals aged 65+
- $12,000 for married couples filing jointly.
- Goal: Reduce taxable income so some seniors pay less or no tax on Social Security benefits.
- Thresholds for Social Security taxation:
- $25,000 for single filers
- $32,000 for joint filers.
- Sunset Date: Ends in 2028 unless extended.
2. Income Phase-Out Rules
- Deduction phases out at higher incomes:
- Starts reducing after $75,000 (single) or $175,000 (married).
- Fully eliminated at $175,000 (single) or $250,000 (married)
- Impact: Large withdrawals from IRAs or big capital gains (e.g., selling property) can push income over the limit and reduce or eliminate the deduction.
- Deduction phases out at higher incomes: