No, Social Security Still Isn’t Tax-Free
If you saw a headline or heard a rumor that Social Security is now tax-free thanks to the new One Big Beautiful Bill Act (OBBB)... take a deep breath. It’s not that simple.
Yes, there’s a new deduction: $6,000 for taxpayers age 65 and older, or $12,000 for married couples filing jointly. That’s real—and it applies whether or not you’ve started collecting benefits. But Social Security itself? It’s still subject to taxation under the same rules we’ve known for years.
Depending on your total income (including interest, dividends, and retirement distributions), up to 85% of your Social Security benefits can still be taxable. What the OBBB did is create a temporary opportunity to lower your overall taxable income, which might—might—keep your Social Security benefits from being taxed.
Let’s say your combined income is just over the line where Social Security becomes taxable. With this deduction in play from 2025 through 2028, you may be able to reduce your adjusted gross income enough to:
Avoid IRMAA (the Medicare premium surcharge)
Lower the portion of benefits that’s taxed
Make Roth conversions more strategic
So What’s the Catch?
This deduction phases out at higher income levels, and it’s only around for four years. That makes 2025–2028 a sweet spot for careful planning—not just for retirees collecting Social Security, but for anyone nearing retirement who wants to lower their long-term tax bill.
If you’re wondering whether this affects your upcoming retirement timeline, Roth conversion strategy, or Medicare costs, now’s the time to map it out.
Let’s create a retirement income plan that makes the most of this window. Grab a spot on my calendar
This article is for informational purposes only and not tax advice. Always consult your tax preparer for guidance specific to your situation.
LynnLeigh & Company - A Registered Investment Advisor This information is provided by LynnLeigh & Co. for general information and educational purposes based upon publicly available information from sources believed to be reliable – LynnLeigh & Co. advisors cannot assure the accuracy or completeness of these materials. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice. Past performance is not a guarantee of future returns.
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