More retirees face taxes on Social Security benefits

Many retired Americans rely on Social Security for their income. However, not all retirees keep the full benefits. The government taxes a portion of Social Security income based on combined income levels. Combined income is calculated by adding adjusted gross income, non-taxable interest income, and half of the annual Social Security benefits. If this total exceeds $25,000 for individuals or $32,000 for couples, they may owe taxes on their Social Security. In 2025, more retirees are expected to pay these taxes due to rising Social Security benefits. These benefits have been adjusted over the years to account for inflation, but the income thresholds have not been updated since 1993. As a result, higher benefits lead to more seniors being taxed. To make the tax system fairer, lawmakers could raise the combined income thresholds so that fewer seniors would be taxed. However, this change does not seem to be a priority. Some believe lawmakers may prefer that most retirees eventually pay taxes on their benefits to help fund the Social Security program. President Trump has mentioned eliminating these taxes during his campaign, but such a move could lead to financial problems for the program. It is uncertain if this proposal will receive enough support. Changes to the income thresholds could still happen, but lawmakers have not shown urgency on the matter in recent years.