Forget Trump’s Promise - Here Are 7 Ways To Cut Taxes on Your Social Security Right Now

One of the most repeated promises of the 2024 campaign was eliminating federal taxes on Social Security. It never happened. Instead of a full repeal, the One Big Beautiful Bill Act of 2025 created a temporary $6,000 senior deduction for those 65 and older, available through 2028 and subject to income phase-outs. For many retirees, it helps, but the underlying formula that has taxed benefits for decades is still fully intact.

That means millions of older Americans are still handing a portion of their benefits for seniors back to the IRS every year, and bills to repeal the tax entirely remain proposals rather than law. Rather than waiting on a promise that has not materialized, there are things you can actually do right now.

Here are seven legal strategies that can reduce what you owe.

Understanding what "combined income" actually is

Before getting to the strategies, you need to know how the tax is triggered.

The IRS taxes Social Security based on a figure called combined income, which is your adjusted gross income plus any tax-exempt interest plus half of your Social Security benefits. If that combined income stays below $25,000 for single filers or $32,000 for married couples filing jointly, none of your benefits are taxed.

Between $25,000 and $34,000 for single filers, or $32,000 and $44,000 joint, up to 50% of benefits can be taxable. Above those upper thresholds, up to 85% can be included in taxable income.

Those thresholds have not changed since 1993 and are not indexed to inflation. That means more retirees fall into the taxable zone every year as benefits rise with cost-of-living adjustments.

Every strategy below works by reducing your combined income or reducing the income you have when it matters most.

Manage your combined income deliberately

The most direct way to reduce taxes on Social Security is to keep your combined income below or closer to the lower threshold.

This means being strategic about which accounts you pull money from, when you take distributions, and how much you withdraw in any given year. One extra IRA withdrawal for a home repair or vacation can push you from the 0% tier to the 50% tier, effectively making part of your Social Security taxable when it would not have been otherwise.

Timing large withdrawals carefully and spreading them across tax years is one of the simplest and most effective moves available.

Convert traditional retirement accounts to a Roth

This is a multi-year strategy that pays off significantly over time.

Qualified withdrawals from a Roth IRA do not count toward combined income for Social Security tax purposes. Withdrawals from a traditional IRA or 401(k) do. The more of your retirement income that comes from Roth accounts, the less of your Social Security becomes taxable.

The best time to do Roth conversions could be before you claim Social Security, or in years when your income is lower. Converting large amounts after Social Security begins can backfire by temporarily spiking your combined income, so the timing and pace of conversions should be planned carefully.

Lean on Roth withdrawals in high-income years

Once you have a Roth IRA built up, using it strategically is one of the most powerful tools for managing your Social Security tax bill.

In years when you expect other income to be high, draw from your Roth instead of your traditional accounts. Because Roth withdrawals are excluded from your adjusted gross income, they do not appear in the combined income calculation and cannot push more of your Social Security into the taxable column.

This is especially useful in years when you have a large required minimum distribution, a capital gain from selling property, or other one-time income events.

Use qualified charitable distributions instead of taking the income yourself

If you are 70 and a half or older and charitably inclined, a qualified charitable distribution (QCD) may be the most tax-efficient tool available to you.

A QCD allows you to transfer up to $111,000 per year directly from your IRA to a qualifying charity. The amount transferred counts toward your required minimum distribution but is excluded from your adjusted gross income entirely. That means it does not appear in your combined income calculation.

If your RMD is $10,000 and you give $10,000 directly to charity via a QCD, you satisfy the RMD requirement while keeping that income off your tax return and away from the Social Security formula.

Harvest investment losses to offset income

If you have investments held in taxable brokerage accounts that are sitting at a loss, selling them to offset gains elsewhere can reduce your adjusted gross income and, in turn, reduce your combined income for Social Security purposes.

This strategy, called tax-loss harvesting, is most useful for retirees who are still managing taxable investment accounts. A lower AGI from harvested losses can push your combined income below a tier threshold, reducing how much of your Social Security is taxable or eliminating the tax entirely.

Know that tax-exempt muni interest still counts

This one catches people off guard.

If you own municipal bonds or municipal bond funds, the interest income is exempt from federal income tax. That sounds like it would not affect your Social Security tax situation. But tax-exempt interest is added back into the combined income formula. It does not count for regular income tax, but it does count for determining how much of your Social Security is taxable.

If you are close to a threshold, a significant amount of muni interest can push more of your benefits into the taxable column even though you owe nothing on the muni interest itself. Some retirees find that shifting from muni bonds to other low-income-producing investments improves their overall tax situation.

Consider a move to a state that does not tax Social Security

Even if you cannot avoid the federal tax, you may be able to eliminate the state-level tax entirely by choosing where you live.

Most states plus the District of Columbia do not tax Social Security benefits at all. The remaining states that do tax benefits vary widely in how much they exempt and at what income levels, with some phasing out the tax for lower-income retirees.

Relocating to a no-tax state is not the right move for everyone, since it involves leaving family, community, and familiar healthcare networks. But if you are already considering a move, the state tax treatment of Social Security should be part of the calculation.

Bottom line

Federal taxes on Social Security were not eliminated. The $6,000 senior deduction created by the 2025 law helps some retirees, but it is temporary through 2028 and phases out for higher earners, while the underlying combined income formula remains exactly as it has been since 1993.

If you want to save money in retirement, the strategies that actually move the needle are the ones that reduce your combined income in the years your benefits are being taxed.

You May Also Like

Almost 80% of Americans Fear a Retirement Age Increase — Here’s the Real Reason Why

By FinanceBuzz Editors

10 Smart Money Moves to Retire Stress Free

By FinanceBuzz Editors

The Easiest Way to Diversify Your Investment Portfolio With Fine Art

By FinanceBuzz Editors

7 Brilliant Ways to Build Wealth After 40

By FinanceBuzz Editors

5 Ways Seniors Are Throwing Away Money

By FinanceBuzz Editors

Best High-Yield Savings Accounts of October 2026

By FinanceBuzz Editors

Save Money and Get Huge Discounts on Everyday Purchases

AARP Benefits

• Huge discounts on travel, groceries, prescriptions and more
• Access to financial planning resources and health tools
• Join AARP and get 25% off with automatic renewal

Become a member now!

---

Subscribe Today

Unlock the Best Banking Deals and Bonuses

From high-yield savings accounts to cashback checking and sign-up bonuses, we bring you the best banking offers to grow your money smarter.

or

SEE TOP BANKING OFFERS →

By submitting this form you agree to receive emails from FinanceBuzz and to the privacy policy and terms

Author Details

Josh Koebert

Josh Koebert has spent more than 16 years digging into the data behind how Americans earn, save, and retire. As a Senior Data Journalist at FinanceBuzz, his work covers both ends of that challenge: the job market and real estate pressures that shape how much people can save, and the Social Security policies, 401(k) strategies, and retirement income gaps that determine what they'll actually have when they get there.