Bonus Deduction for Seniors

DEAR TRUST OFFICER:

Are seniors getting a $6,000 bonus next year in their Social Security benefits?

—HOPEFUL RETIREE

DEAR HOPEFUL:

No, there is no benefit bonus next year. We’ve had this question a few times, and the confusion apparently comes from a new senior deduction that is in place for this tax year. The extra deduction for each taxpayer over age 65 is $6,000, so a married couple gets an added deduction of $12,000. The extra deduction replaced President Trump’s proposal to make Social Security benefits tax free again, and for some taxpayers this will be the exact result.

However, higher-income taxpayers may not enjoy the new extra deduction, as it begins phasing out at modified adjusted gross income of $75,000, or $150,000 for married couples filing jointly. Reminder: If you are 73 or older this year, you will need to take Required Minimum Distributions from your IRAs and employer retirement plans. These distributions will count toward the phase-out of the new senior deduction.

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Bonus Deduction for Seniors

A new senior deduction is in place for this tax year.

Bonus Deduction for Seniors