The recently unveiled One, Big Beautiful Bill could provide some additional tax relief to seniors who are beneficiaries of Social Security.
President Donald Trump made a promise to seniors to provide additional tax relief after their retirement had been robbed by inflation over the past four years under the previous administration. The One, Big Beautiful Bill is a fulfillment of President Trump’s promise. Thanks to this bill, seniors will now be able to enjoy an additional break of $4,000 to the standard deduction, meaning that millions of low and middle income seniors will have more money.
Social Security retirees to benefit from the One, Big Beautiful Bill
Jason Smith (MO-08), the chairman of the Ways and Means Committee stated, “Seniors spent the last four years struggling to make ends meet under Biden’s out-of-control inflation. Republicans are keeping President Trump’s promise to help seniors afford the cost of living through an expanded senior deduction in The One, Big, Beautiful Bill. This bill helps low- and middle-income seniors like my aunt who worked as a Walmart greeter to supplement her Social Security check. By keeping his promise to help seniors, President Trump is ensuring millions more Americans will be able to afford groceries and medication and enjoy a dignified retirement.”
According to the official Ways and Means website, “The One, Big, Beautiful Bill Puts American Workers First.”
The following will come into effect under the One, Big Beautiful Bill, as stated on the Ways and Means website:
- No Tax on Tips:
- 100% elimination of income taxes on any tipped income for the 4 million tipped workers.
- No Tax on Overtime:
- 100% elimination of income taxes on the overtime pay premium for the over 80 million hourly workers.
- Tax Relief for Seniors:
- Middle- and low-income seniors will be able to deduct an additional $4,000.
- No Tax on Auto Loan Interest:
- The average American family will be able to fully deduct auto loan interest for American-made cars.
Additionally, Trump’s 2017 pro-worker tax cuts will also be made permanent. These tax cuts were put into effect during his first term in office and was set to expire at the end of this year. This means that the lower tax rates and brackets as established by Trump will be made permanent, along with the double guaranteed Standard Deduction.
Furthermore, the One, Big Beautiful Bill will prevent the loss of 6.6 million jobs, 1.1 million of which are in the manufacturing sector.
A complete outline of how this bill puts American workers first can be found here.
Real world examples of the benefit of this tax cut
Increasing the standard deduction for seniors by $4,000 will provide a great deal of help to this cohort whether they are continuing to work or receiving Social Security.
Here are two examples of how this tax cut could benefit a variety of seniors in differing ways, as explained on the official Ways and Mean website:
Example 1
A retired Florida couple, who are seniors and have just purchased a new car, will receive a tax cut amounting to $1,650. This figure was calculated because of several policies under the One, Big Beautiful Bill, such as the increased Standard Deduction for filers, and other senior benefits like no tax on auto loan interest payment.
Florida Couple, married, purchased new car: Enhanced standard deduction + Enhanced deduction for seniors +Car loan interest deduction = $1,650 tax cut
This excess $1,650 that the couple will now have can be used to help cover their groceries, housing, or medical needs.
Example 2
A married senior citizen who works as a taxi driver and earns tips in New Jersey could have an additional $1,989 to spend thanks to the President Trump’s tax relief which eliminates tax on tipped income.
New Jersey taxi driver, married, senior: Enhanced standard deduction + Enhanced deduction for seniors + No tax on tips = $1,989 tax cut