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Most Americans think they pay more than their fair share of taxes, according to Pew Research (1) data.
But for retirees living on a fixed income, every cent counts. And after spending years paying into the Social Security system, having to carve up a share of your hard-earned benefits for the IRS can be hard to swallow. So it was no surprise that Donald Trump’s 2023 campaign promise to end taxes on Social Security benefits generated a lot of interest — and plenty of heated debate.
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In an effort to deliver on that promise, the Trump administration introduced a temporary bonus $6,000 deduction ($12,000 for couples filing jointly) for older Americans in the One Big Beautiful Bill, signed into law in 2025.
Trump recently touted this change as “THE LARGEST TAX CUTS IN AMERICAN HISTORY,” in a Truth Social post, declaring “We gave you NO TAX ON TIPS, NO TAX ON OVERTIME, and NO TAX ON SOCIAL SECURITY for our Great Seniors! (2)”
To be sure, that extra $6,000 deduction will go a long way for some U.S. seniors, especially those making between $80,000 to $130,000. Estimates from the Tax Policy Center suggest it would offer retirees in the 60- to 80-percentile range an average tax cut of about $1,100 or about 1% of their after-tax income (3).
However, as the center notes, most retirees will see their taxes reduced rather than eliminated entirely.
The reality is, if your combined income exceeds $25,000 per year (or $32,000 for married couples filing jointly), a portion of your Social Security benefits could be subject to federal income taxes.
But a hefty bill each year isn’t inevitable, either. There are several ways to lower or even eliminate your tax burden on Social Security that have nothing to do with the president’s policies.
Here are five steps you can take now to start chipping away at your bill. With a little strategy and planning, you could potentially offset your owings completely — which may be even more satisfying than waiting on Washington to give you a reprieve.
Step 1. Pull from Roth IRAs, not traditional accounts
The IRS uses a figure called provisional income (the Social Security Administration calls it combined income) to decide how much of your benefit is taxable.This is “essentially half of your Social Security benefit plus other income, such as retirement plan distributions and any interest earned on municipal bonds,” according to T. Rowe Price (4). If that figure tops $25,000 for single filers (or $32,000 for couples), up to 50% of your benefit can be taxed. Above $34,000 or $44,000, up to 85% can be. Those thresholds aren’t indexed to inflation.
Qualified Roth IRA withdrawals, however, don’t count toward provisional income. Routing your retirement income through a Roth first, instead of a traditional IRA or 401(k), can keep that formula lower.
Roth accounts can be a valuable tool for managing taxes in retirement, but choosing the right account structure is only part of the equation. You’ll also need to decide how to invest your savings.
For investors who want more control over their retirement portfolios, a self-directed IRA can offer access to a wider range of investments while preserving the account’s tax advantages.
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Step 2. Convert before you claim, not after
Since Roth IRA withdrawals don’t count towards provisional income, it makes sense to execute your Roth conversions before you claim Social Security benefits. This is especially important if you have sizable balances in retirement accounts like a traditional IRA or 401(k) plan.
Convert them early, take the tax hit on the conversions and create a large Roth balance that you can withdraw in retirement without adding to your provisional income. The timing here matters because the converted amount counts as taxable income in the year you make the conversion.
But keep in mind that large conversions at 63 or older can raise your Medicare premiums two years later. You’ll want to get the timing on this right.
Step 3. Send RMDs to charity
Once you turn 73 (or 75 for anyone born after 1960), the IRS requires you to take withdrawals from your retirement accounts. These required minimum distributions (RMDs) land squarely in your provisional income, potentially exposing your Social Security benefits to taxes.
Roth conversions, as mentioned above, can reduce this risk. But if you reach 70½ with a sizable retirement account balance, there is another solution: charity.
A qualified charitable distribution (QCD) is a direct, tax-free transfer of funds from an individual retirement account (IRA) to a qualified charity. According to Fidelity (5), this transfer can be used to satisfy your RMD while avoiding the tax implications.
You can give up to $111,000 this way in 2026. The money never shows up in your income, so it doesn’t count toward provisional income. And keep in mind that QCDs come only from IRAs, not 401(k)s.
Between Roth conversions, required minimum distributions and charitable giving, reducing taxes on Social Security can involve several moving parts. And a strategy that works for one retiree might not make sense for another.
Before making major changes to your retirement accounts, it may be worth getting professional guidance to understand the potential tax consequences.
That’s where Advisor.com can come in. The platform connects you with an expert near you for free.
Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.
Just enter a few details about your finances and goals, and Advisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.
Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation, with no obligation to hire, to see if they’re the right fit for you.
Once you’ve got the right financial advisor in your corner, the next step is getting a clear picture of where your money’s actually going. That starts with the basics — budgeting and tracking your spending.
Step 4. Use tax-loss harvesting
Selling some investments at a loss to offset capital gains taxes on winners is standard portfolio hygiene. But this tactic becomes even more valuable when you’re trying to minimize taxes on benefits.
Losses first cancel out gains you’ve realized, which would otherwise count toward your provisional income. Beyond that, you can deduct up to $3,000 a year against other income and carry the rest forward.
Step 5. Don’t assume municipal bonds are a free pass
Municipal bonds or munis are famously “tax-free.” That exemption covers federal income tax, and often state tax on in-state bonds, but it doesn’t keep the interest out of the Social Security formula.
In fact, the SSA’s own formula adds “nontaxable interest” to the calculation. That means if your portfolio is heavily reliant on interest from munis, you could be at risk of having a portion of your benefits taxed.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Pew Research Center (1); Trump’s Truth (2); Tax Policy Center (3); T. Rowe Price (4); Fidelity (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
