Welcome back, everyone. With tax season upon us, we’re answering some of the tax-related questions you’ve sent to us over the past week. David, from Tiverton, R.I., asked if his Social Security income was taxable for tax year 2025. That’s a great question, and a topic of recent confusion. President Trump had frequently promised that he would eliminate taxes on Social Security, but the provision that Congress passed as part of the big tax and policy bill last summer did something different. But even after the legislation was signed, the administration continued to mischaracterize the tax break, while the Social Security Administration sent out a misleading email that said a new break would eliminate federal income taxes on retiree benefits. (The agency later corrected its announcement). Here’s what’s actually happening: People who are 65 and older (by Dec. 31 of the tax year you’re filing for) are eligible for a tax deduction of up to $6,000 for individuals and $12,000 for married couples, as long as both spouses qualify. The deduction begins to gradually fade once your modified adjusted gross income passes certain thresholds — $75,000 for single filers or $150,000 for married joint filers. Above those amounts, the deduction begins to decrease, and it goes away once single taxpayers’ income reaches $175,000 ($250,000 for couples). This deduction (in place for tax years 2025 through 2028) will help reduce households’ tax bills on their overall income, including Social Security — but it’s not a direct cut on benefits. And Social Security beneficiaries who are 62 to 64 are ineligible. You can find more details in my story, which we published last summer. And these two stories explain how taxation on Social Security benefits generally work. If you have any other tax-related questions, please send them our way: yourmoney_newsletter@nytimes.com. Below, you’ll find a roundup of recent money stories from across The Times.
How are we doing? Like this email?
|
