Don’t Be Fooled: “No Taxes on Social Security” Doesn’t Mean What You Think

Don’t Be Fooled: “No Taxes on Social Security” Doesn’t Mean What You Think

You may have seen headlines recently claiming there’s “No Taxes on Social Security” — but let’s be clear: that doesn’t mean your Social Security benefits are completely tax-free.

At Persitz CPA, I want to break down what’s really changed and what hasn’t—so you can make informed decisions about your retirement income and taxes.

✅ What Hasn’t Changed: Social Security Can Still Be Taxable

Despite some recent media buzz, the way Social Security benefits are taxed has not changed. As it has been for decades, up to 85% of your Social Security income may be taxable depending on your overall income.

The IRS uses a formula based on your modified adjusted gross income (MAGI), which includes things like wages, investment income, pensions, and tax-exempt interest. When your income exceeds certain thresholds, a portion of your benefits becomes taxable.

🆕 What Has Changed: A New Temporary Senior Deduction

Here’s the real update: Congress has introduced a temporary “senior bonus” deduction that can reduce the taxable portion of Social Security benefits from 2025 through 2028.

This new deduction can be worth:

• Up to $6,000 for single filers

• Up to $12,000 for married couples filing jointly

👉 Good news: This deduction applies per individual and can now be claimed even if you itemize deductions.

📉 Income Phase-Out Limits

The senior deduction begins to phase out when your modified adjusted gross income (MAGI) exceeds:

• $75,000 for single filers

• $150,000 for joint filers

The deduction phases out entirely once income reaches:

• $175,000 for single filers

• $250,000 for joint filers

So while not everyone will qualify for the full deduction, many seniors will still benefit from lower taxable income over the next few years.

💡 What This Means for You

If you’re retired or approaching retirement, this could result in a meaningful reduction in the taxes you owe on your Social Security benefits—but it won’t eliminate those taxes entirely.

Every situation is different, so it’s important to consider how this deduction fits into your full retirement income plan. That’s where I can help.

📞 Let’s Talk Tax Planning for Retirement

At Persitz CPA, I specialize in helping individuals and families navigate the complexities of retirement tax planning. Whether you’re already receiving Social Security or you’re planning ahead, I can help you:

• Maximize tax-saving opportunities

• Understand how the new deduction applies to you

• Strategically plan for 2025–2028 and beyond

👉 Don’t rely on viral TikTok advice—trust a real tax professional. Get in touch today to schedule a personalized consultation.

For personalized assistance with your small business tax preparation, strategic bookkeeping, or comprehensive business consulting in Michigan, explore my services or contact Persitz CPA for a consultation.