Latest news with #CommitteeForAResponsibleFederalBudget
Daily Mail
a day ago
- Business
- Daily Mail
Social Security tax break means $6,000 more a year for those who fit a particular criteria
Some seniors are about to get a major Social Security tax break as a result of Donald Trump's 'big, beautiful bill.' The bill offers a $6,000 tax deduction for individuals 64 and over who pay income tax on their Social Security benefit because they earn over a certain threshold. However, the deduction starts phasing out for individuals who earn more than $75,000, or $150,000 for couples. Those earning $175,000 or over - $250,000 for couples - are not entitled to the deduction at all. 'This amounts to the largest tax break in American history for our nation's seniors,' the White House Council of Economic Advisers wrote in a recent report. However, 64 percent of seniors do not earn enough to pay taxes on Social Security anyway, and therefore will not benefit from the break. For those it does affect, the break will only last until 2028 when Trump leaves office. The $6,000 measure falls short of Trump's initial promises to remove all taxes on Social Security income. Wealthy retirees will receive the 'significant' tax break until 2028 However, the White House argues it comes close with 88 percent of seniors now no longer subject to tax on the benefit. 'The One Big Beautiful Bill delivers on President Trump's promise of no tax on Social Security,' a spokesperson for the White House said in a statement. This is a 'substantial tax break' for upper-middle class Americans who pay taxes on retirement benefits, Marc Goldwein, from the Committee for a Responsible Federal Budget, told Axios. However, for the millions of senior citizens who live in poverty and therefore are not taxed on their benefit it offers no relief at all, he added. The added cost will also bring forward the expected date at which Social Security and Medicare are estimated to run out of funds. The cost of the new tax deductions will see that date moved forward by a year, to 2032, according to analysis from the Committee for a Responsible Federal Budget. Some have questioned whether seniors are the group most in need of a tax break given their assets have soared in value over their lifetimes. 'As a whole seniors in this country are the wealthiest cohort in the history of the known universe,' Goldwein said. The $6,000 measure falls short of Trump's promises to end all taxes on Social Security income Social Security relies on its trust funds to provide monthly benefit checks to around 70 million Concerns over the long-term future of Social Security are pushing retirees to begin banking their checks as early as possible, even though delaying their claims could lead to higher payments. Every year you delay taking a Social Security payment after full retirement age you receive a significant increase in payments up to the age of 70. Benefits taken for the first time at age 70 would be 76 percent higher than if they were claimed at 62, according to Boston University economist Laurence Kotlikoff. Therefore, someone who put off claiming until they were 70 instead of 62 would end up with more dollars in their pocket if they live to at least 80.
Yahoo
2 days ago
- Business
- Yahoo
Tax break for seniors: Trump bill includes additional $6,000 deduction
President Trump's sweeping domestic policy bill that passed the House on Thursday provides a $6,000 boost to senior citizens' standard deduction from 2025 through 2028. The new temporary tax break — $6,000 for individuals and $12,000 for couples — is for tax filers age 65 and older. It starts phasing out for those who earn over $75,000 ($150,000 for couples). 'Low-income seniors won't benefit at all, and nor will very high-income seniors,' Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, a nonpartisan group that advocates for fiscal responsibility, told Yahoo Finance. 'The biggest beneficiaries are upper-middle-class seniors with significant wealth, who have a lot of discretion over how much income to realize in a given year,' he said. To be clear, this provision does not eliminate taxes on Social Security benefits as Trump promised in the campaign. It is a temporary income tax deduction, not a cut in the Social Security tax. The new deduction could also accelerate Social Security and Medicare insolvency by a year, to 2032, per an analysis from the Committee for a Responsible Federal Budget. Some background: Most lower-income seniors don't have enough of a tax liability to claim the new deduction. In 2022, the median income of older adults was $29,740, according to the National Council on Aging. The majority of taxpayers claim the standard deduction, which is $15,000 (or $30,000 for couples) for 2025. Seniors who are single filers already qualify for an additional deduction of $2,000. (If you're married, filing jointly or separately, it's $1,600 per qualifying individual.) Read more: Standard deduction vs. itemized: How to decide which tax filing approach is right This newly passed short-term deduction raises that amount by another $6,000. Taxation of Social Security benefits is a hot-button issue and often catches seniors at modest income levels by surprise. Most states do not tax Social Security benefits, but about 40% of people who get Social Security must pay federal income taxes on their benefits, according to the Social Security Administration. If you file a federal tax return as an individual and your combined income from all sources, including your Social Security benefit, is between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits. If your income exceeds $34,000, up to 85% of your benefits may be taxable. For joint filers, if you and your spouse have a combined income between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits; if it's more than $44,000, up to 85% of your benefits may be taxable. 'That's a big shocker for our clients,' Ryan Haiss, a certified financial planner at Flynn Zito Capital Management in Garden City, N.Y., told Yahoo Finance. 'A lot of our clients exceed the $44,000 of combined income for Married Filing Jointly, and it is just something that is understood, and we consider when planning for retirement,' Haiss added. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Read more: Do you pay taxes on Social Security?The new deduction could be a meaningful benefit for middle-income retirees, helping lower their overall tax bill. However, Haiss said, 'because of those income limits, many higher-income retirees, especially those already taking RMDs and collecting Social Security, likely won't qualify.' Most of the nearly 9 in 10 Americans age 65 or older collecting Social Security don't pay tax on this income and it's the bulk of cash they use to pay living expenses. The average monthly benefit: $1,975, which adds up to less than $24,000 a year. Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky. Sign up for the Mind Your Money newsletter
Bloomberg
4 days ago
- Business
- Bloomberg
Not a Fan of Bill: MacGuineas on Senate Passing Tax Bill
Maya MacGuineas, President of the Committee for a Responsible Federal Budget, shares her frustration with the Trump Tax Bill passing in the Senate and talks about whether or not the legislation will pass in the House. She talks about the issues she has with the bill, if the House will not accept the Senate version of the Tax Bill and go back to their version, and what she would take out of the bill if she could. Maya MacGuineas speaks with Kailey Leinz and Joe Mathieu on the late edition of Bloomberg's "Balance of Power." (Source: Bloomberg)
New York Times
05-06-2025
- Politics
- New York Times
Quote of the Day: Republicans Work to Discredit Experts' Tax-Cut Warning
'Without that you have chaos.' MARC GOLDWEIN, a senior vice president at the Committee for a Responsible Federal Budget, on the necessity of nonpartisan offices that estimate the costs of legislation outweighing the frustrations over their forecasts.
Washington Post
31-05-2025
- Business
- Washington Post
Wall Street warns Trump aides the GOP tax bill could jolt bond markets
Wall Street bankers and executives are privately warning the Trump administration that the tax bill moving through Congress could stoke investor anxiety about rising deficits, push up U.S. borrowing costs and damage the broader economy, according to more than a dozen people familiar with the matter. House Republicans this month approved a measure projected to add $2.3 trillion to the national debt over the next decade, primarily by extending tax cuts from 2017 — and it would add more than $5 trillion in debt including interest costs and likely future extensions, according to the nonpartisan Committee for a Responsible Federal Budget. That legislation, which would also beef up immigration enforcement and defense spending, is President Donald Trump's top legislative priority. The Senate is due to take it up soon.
