You may have heard about the “One Big, Beautiful Bill” that was signed into law on July 4, 2025. Many people are confused about what this new law actually does for Social Security taxes. Let’s clear up the confusion and explain what this really means for you and your family.
If you need professional assistance, call (915) 775-1040 today.
What This Law Does NOT Do
First, let’s be clear about what this law doesn’t do. Despite what you may have heard during campaign season, this law does not eliminate taxes on Social Security benefits. The promises made during the campaign suggested that seniors would never have to pay taxes on their Social Security again. That’s not what happened.
What This Law Actually Does
Instead of eliminating Social Security taxes completely, the new law creates a temporary tax deduction for seniors. Here’s how it works:
Who qualifies: You must be 65 years old or older to use this deduction.
How much you can deduct:
- $6,000 if you’re single
- $12,000 if you’re married filing jointly
What it does: This deduction can reduce or even eliminate the amount of your Social Security benefits that get taxed by the federal government.
The Income Limits
This deduction isn’t available to everyone. The law includes income limits, which means higher earners will see their deduction reduced or eliminated completely. The exact income thresholds will be determined by the IRS, but the deduction phases out as your income increases.
Who Benefits Most (And Who Doesn’t)
Who sees the biggest benefit: Middle-income seniors who currently pay some taxes on their Social Security benefits will likely see the most savings from this deduction.
Who doesn’t benefit:
- Seniors with very low incomes who already don’t pay any taxes on Social Security won’t see any change
- High-income seniors may not qualify for the deduction at all due to the income limits
The Fine Print: It’s Temporary
Here’s something important that many people don’t realize: this deduction is temporary. The law is set to expire in 2028. This means that unless Congress acts to extend it, seniors will go back to the old tax rules after 2028.
What This Means for Your Tax Planning
If you’re 65 or older, this deduction could lower your tax bill for the next few years. However, because it’s temporary, you shouldn’t count on it being around forever when making long-term financial plans.
We recommend talking to a tax professional about how this change affects your specific situation. The impact will be different for everyone based on your income level and overall tax picture.
The Bottom Line
The “One Big, Beautiful Bill” provides some tax relief for many seniors, but it’s not the complete elimination of Social Security taxes that was promised during the campaign. It’s a temporary deduction that will help some seniors but not others.
If you have questions about how this new law affects your taxes or want to discuss your tax planning strategy, contact Marcus, Fairall, Bristol + Co., PLLC. We’re here to help El Paso seniors and families navigate these changes and make the most of their tax situation. Call (915) 775-1040 to get started.