Big Changes to Social Security Taxes? Here’s What Retirees Need to Know

At Whitener Capital, we keep a close eye on legislation that affects your retirement income — and 2025 is shaping up to bring some big opportunities.

The newly passed bill, The One Big Beautiful Bill Act (OBBBA), includes a major change that could reduce — or even eliminate — federal taxes on Social Security income for many retirees. Let’s break down what this could mean for you.

A New Senior Deduction Is on the Table

Starting in 2025, the OBBBA introduces a “senior deduction” designed to give retirees some much-needed tax relief.

Here’s how it works:

• $6,000 deduction for single filers

• $12,000 deduction for joint filers

• Available to taxpayers age 65 and older

• Starts in 2025 and phases out at higher income levels

• In addition to standard deductions

That last point is key — this is an extra deduction on top of what you already get. Depending on your income level, this could push more of your Social Security income out of the taxable range.

The Impact: Potentially Fewer Retirees Paying Taxes on Social Security

There’s no change to how Social Security benefits are taxed per se — the current formula remains in place.

• Many retirees may fall below the income thresholds that trigger Social Security taxation

• This means potentially significant tax savings for lower- and middle-income households

• Tax planning becomes even more important to make the most of these temporary rules

What Should You Do Now?

The OBBBA was signed into law on July 4th, 2025, and its provisions are expected to remain in effect through at least 2028 — making now a smart time to prepare.

Consider these proactive steps:

• Review your projected income and deductions for the next few years

• Consider Roth conversions or other tax-efficient withdrawal strategies while you can still benefit

• Coordinate with your advisor to avoid triggering Medicare premium increases or state tax issues

Whitener Capital Is Here to Help

Tax laws are always changing — and your financial strategy should change with them.

At Whitener Capital, we help retirees navigate complex tax rules and make confident, informed decisions about their income, investments, and legacy. Whether it’s new legislation like the OBBBA or tried-and-true planning strategies, we’re by your side.

Let’s talk through your 2025 tax plan — and beyond.