Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. Nearly two full years since "no tax on Social Security" became a presidential campaign slogan, retirees collecting benefits are still paying taxes. Despite the passing of President Donald Trump's signature One Big Beautiful Bill Act in July 2025, it "does not include this provision," according to the Tax Foundation (1).
Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one JPMorgan still sees gold hitting $5,000/oz by Q4 — and savvy investors are protecting their wealth with a tax-advantaged Gold IRA. Learn more with a free guide from Priority Gold The tax breaks in Trump's 'big beautiful bill' expire after 2028 — and experts say most people won't act in time. What to do before the window closes Instead, the bill includes something much narrower: a special and temporary tax deduction spread across different income bands.
And the structure of this deduction has far-reaching impacts for all taxpayers, even those who are years away from retirement or claiming benefits. The enhanced deduction for older Americans applies to those beneficiaries above a certain age (65) and can only be claimed between 2025 and 2028, according to the IRS (2). There's also income thresholds.
The deduction phases out for taxpayers with modified adjusted gross income over $75,000, or $150,000 for joint filers. Because of these narrow parameters, the Tax Policy Center (3) estimates that the tax reduction will "benefit fewer than half of older adults." And even for those who qualify, they just receive a tax reduction, not elimination. This reduction also cuts the program's revenue by roughly $91 billion over its four-year term, according to analysis by the Joint Committee on Taxation, as cited by the Peter G.
This, along with several other tax cuts implemented by the OBBBA, accelerated the Social Security trust fund's depletion to 2032, one year earlier than anticipated, according to the Bipartisan Policy Center (5). Simply put, some beneficiaries will see their taxes reduced temporarily, but all beneficiaries could see their benefits cut over the long term, unless Congress intervenes. The Committee for a Responsible Federal Budget anticipates that retirees could face a 24% benefit reduction (6).
Until then, there are several ways to protect your wealth and retirement. Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here's where their money is actually going Since Social Security's future is highly unpredictable, the best way to prepare might be to make your retirement plan less reliant on benefits in the first place.
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