Tax Eliminated on Social Security Benefits - Mouse Print Says NO!

[Bekeart]

Claim of - Tax Eliminated on Social Security Benefits - Mouse Print Says NO!

Mouse Print* – Exposing the strings and catches buried in the fine print.

Mouse Print exposes the strings and catches in advertising fine print.

www.mouseprint.org

Before the bill passed, the Senate parliamentarian ruled that changes to social security could not be made in this type of bill and the provision to not tax social security benefits was completely removed from it.

*MOUSE PRINT:

So how can the Social Security Administration claim the new law includes such a provision? They point to another measure in the law — a new $6,000 senior deduction — that would supposedly offset the income taxes that would otherwise be due on social security earnings for most people. The deduction is applied against other income too, however. And as their income rises, the deduction decreases to zero and is completely phased out after 2028.

*****
Bekeart

Some will rob you with a six-gun, And some with a fountain pen.

 

[GnarlsR2]

"A lie gets halfway around the world before the truth has a chance to get its pants on." ~ Winston Churchill

 

[lestert357]

My guess is that the $6,000 senior deduction, which I think will be very popular, will be renewed or become permanent in 2028 because neither political party will want to own eliminating it.

 

[s&wchad]

This is a good thing for most seniors over 65 on SS. The added $6K (per person) is phased out if the married couple has a MAGI over $150K.

This is from Kiplinger:

2025 Tax Deduction Change for Those Over Age 65

Adjustments to the extra standard deduction can impact the tax bills of millions of older adults.

www.kiplinger.com

A standard deduction of $46,700 is nothing to sneeze at!

 

[Tom S.]

• This deduction is phased out between income levels:
  • $75,000–$175,000 for individuals
  • $150,000–$250,000 for couples

 

[ladder13]

My guess is that the $6,000 senior deduction, which I think will be very popular, will be renewed or become permanent in 2028 because neither political party will want to own eliminating it.

They’re going to be boxed in. Those always using the “they are taking away your SS”.

 

[llowry61]

The deduction will help seniors with lower income levels which isn't a bad thing. Right? As far as how it is spun is just that more spin. They all do it so you just have to read and educate yourself.

BTW what was the old saying - the pen is mightier than the sword ?

 

[DWalt]

Claim of - Tax Eliminated on Social Security Benefits - Mouse Print Says NO!

Mouse Print* – Exposing the strings and catches buried in the fine print.

Mouse Print exposes the strings and catches in advertising fine print.

www.mouseprint.org

Before the bill passed, the Senate parliamentarian ruled that changes to social security could not be made in this type of bill and the provision to not tax social security benefits was completely removed from it.

*MOUSE PRINT:

So how can the Social Security Administration claim the new law includes such a provision? They point to another measure in the law — a new $6,000 senior deduction — that would supposedly offset the income taxes that would otherwise be due on social security earnings for most people. The deduction is applied against other income too, however. And as their income rises, the deduction decreases to zero and is completely phased out after 2028.

*****
Bekeart

Some will rob you with a six-gun, And some with a fountain pen.

The increased exemption will be beneficial only to some lower income taxpayers.

 

[Baltimoreed11754]

I love the no tax on tips bs. What waitress claims those extra dollars left behind for good service as income? Or any of the money people make on their side jobs. Whatever money the government is ‘giving’ working Americans they are taking it from us somewhere else and then some. THE COUNTRY IS 35 TRILLION DOLLARS BROKE. And these fool’s cant balance a yearly budget let alone pay back what is owed. All they know how to do is kick the can down the road and borrow more. BTW, the national debt was only 5 trillion when Ross Perot ran for president.

 

[old bear]

What about so many of us are "mid-level" tax payers?. My combined annual income is between $80,000 and $1.000,00?

 

[FlyFish]

I really don't understand the "no tax on tips" thing. For years we've been told that we should tip [generously] because servers receive a very low base wage and depend on tips to make up the difference between that and reasonable compensation, i.e., tips are a significant part of their income. If that's the case, why shouldn't those tips be considered taxable? When I was working (retired now) I had to pay taxes on all of my income.

 

[s&wchad]

What about so many of us are "mid-level" tax payers?. My combined annual income is between $80,000 and $100,000?

A single with $100K income should see an additional $4500 added to their standard deduction.

$100K-$22,250 ≈ $77,750

That puts you in the 22% bracket, which means you'll pay a little over $17K in Federal tax.

You might save a lot of money if you got married!

 

[Jon651]

The increased deduction on Social Security benefits is not "No tax on Social Security"; the deduction is reduced as your income climbs (which also includes non-Social Security sources of income) and sunsets after 3 years.

The "No Tax On Tips" applies to the first $25k of salary earned from tips. It also sunsets after 3 years.

The "No Tax On Overtime" applies to the first $12,500 of overtime pay. This too sunsets in 3 years.

There was no reason to sunset ANY of these provisions - if the country doesn't need the tax income for the next 3 years then we don't need it ever. As a retired professional firefighter who worked a 56-hour work week, the tax code was already skewed against us. We only collected overtime past 53 hours per week so perhaps I'm a little biased. Even though I'm well past my working years on shift, for my brothers and sisters still on the job I would have liked to see that overtime tax benefit be a bit more robust - and a bit more permanent.

 

[22hipower]

I really don't understand the "no tax on tips" thing. For years we've been told that we should tip [generously] because servers receive a very low base wage and depend on tips to make up the difference between that and reasonable compensation, i.e., tips are a significant part of their income. If that's the case, why shouldn't those tips be considered taxable? When I was working (retired now) I had to pay taxes on all of my income.

Tips should be taxable as should any income. But, we have all kinds of provisions to buy votes, some for lower income folks, some for the more wealthy. Frankly I prefer those that help the lower income folks but I'm not sure that should be limited just to those being paid with tips. Of course including a benefit for OT helps those who don't get tips.

 

[Scooner]

IMO this was all great!!
the new SS deduction/credit is about double what it was last year unless you mk over 250k taxable - then you lost a tiny deduction
the tax breaks on OT and tips is great for all those who can take advantage of it

 

[Onomea]

I think it unlikely that most tipped workers were paying taxes on tips anyway due to low annual income for service workers and the reliance on self reporting of tipped income.

 

[Jerry in SC]

Sure going to help us with our RMD going up in the coming year.

There’s some gamesmanship in crafting legislation, with a sunset clause appeasing certain factions. It’s pretty difficult getting 219 members of congress and 51 senators to agree on anything this complex.

And there is no reason further tax changes can’t be legislated.

We all aren’t in the same financial situation. Everyone has a different take depending on their circumstances.

 

[dockmurgw]

What about so many of us are "mid-level" tax payers?. My combined annual income is between $80,000 and $1.000,00?

The 2017 Tax Cuts & Jobs Act, which was sunsetting this year, is now permanent. Thats a huge win for all.

 

[ladder13]

Tough to please 350 million Americans.

 

[LVSteve]

I hit 65 this year so the new deduction is going to make a big difference to our taxes. There's no way we make a combined $150k+.