I plan to retire soon and begin receiving my Social Security retirement benefits. I heard that the new big, beautiful bill eliminated taxes on Social Security. What can you tell me?

The new law, known as the One Big Beautiful Bill Act (OBBBA), did not eliminate Social Security taxes. It did, however, provide a temporary “senior bonus” deduction (starting in 2025 through 2028) of up to $6,000 for each eligible taxpayer age 65 or older. The deduction begins to phase out for taxpayers with an adjusted gross income over $75,000 for single taxpayers or $150,000 for joint filers. This new provision is a deduction for seniors and not a refundable credit, thus it will not benefit lower-earning seniors who owe no income taxes.

Who Owes SSA Taxes?

Whether your Social Security benefits are taxed depends on your total income and filing status. Approximately 40% of individuals receiving Social Security have total income levels that trigger federal income tax on their benefits.

To determine if your benefits will be taxable, the first step is to add up your non-Social Security income including wages, taxable and tax-exempt interest, dividends, pensions and taxable retirement plan distributions, self-employment and other taxable income. To that total, add half of your annual Social Security benefits.

If you are single and your combined income from all the listed sources is:

• Less than $25,000, your benefits will not be subject to federal income tax.
• Between $25,000 and $34,000, up to 50% of your benefits will be taxed at your regular income tax rate.
• More than $34,000, up to 85% of your benefits will be taxed.

If you are married and filing jointly and the total from all sources is:

• Less than $32,000, your benefits will not be taxed.
• Between $32,000 and $44,000, up to 50% of your benefits will be taxed.
• More than $44,000, up to 85% of your benefits will be taxed.

If you are married and file a separate return, you will probably pay taxes on your benefits.

To help you with the calculations, review a copy of IRS Publication 915 “Social Security and Equivalent Railroad Retirement Benefits,” which provides detailed instructions and worksheets. You can download it at IRS.gov/pub/irs-pdf/p915.pdf or call the IRS at 800-829-3676 and request a free copy through the mail.

You can also find out if any of your benefits are taxable through the IRS online tax tool which asks a series of questions that will help you determine your status. To access this tool, go to IRS.gov/help/ita and click on “Social Security or railroad retirement tier I benefits - Are mine taxable?” 

To limit potential taxes on your Social Security benefits, you should be cautious when taking distributions from retirement accounts or other sources. In addition to triggering ordinary income tax, a distribution that raises your gross income can bump up the proportion of your Social Security benefits that are subject to taxes.

How to File

If you find that part of your Social Security benefits will be taxable, you will need to file an income tax return using Form 1040 or Form 1040-SR. If you expect to owe taxes, you should make quarterly estimated tax payments to the IRS or have taxes automatically withheld from your benefit payments.

To have the taxes withheld, you must complete IRS Form W-4V, Voluntary Withholding Request (IRS.gov/pub/irs-pdf/fw4v.pdf), and file it with your local Social Security office.

State Taxation

In addition to the federal government, nine states – Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia – tax Social Security benefits to some extent. If you live in one of these states, check with your state tax agency for details.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of “The Savvy Senior” book.  Any links in this article are offered as a service and there is no endorsement of any product.  These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics.  Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.  

On September 2, the U.S. Department of Treasury published a preliminary list of 68 jobs that qualify for the “No Tax on Tips” deduction. The One Big Beautiful Bill Act (OBBBA) created a $25,000 deduction for tipped income. The deduction applies to single individuals with incomes up to $150,000 or married couples filing jointly with incomes up to $300,000.

The list is divided into eight industry categories. The release states, "Treasury and the IRS anticipate that the official proposed list will be substantially the same as this preliminary list."

The list is quite broad. Tax Foundation Senior Policy Analyst Alex Muresianu stated, "This is a much broader set of occupations than I think some were expecting. As such, the policy could end up being more expensive than previously anticipated." The "No Tax on Tips" provision is available from 2025 until 2028. The federal government estimated the cost would be $32 billion over the next decade.

There are eight principal categories for the occupations. A non-exhaustive list of jobs within each category is as follows:

1. Beverage & Food Service — This section includes bartenders, wait staff, food service staff, chefs, cooks, fast food workers, dishwashers, restaurant and coffee shop workers and bakers.
2. Entertainment & Events — This category includes dancers, individuals working in gambling establishments such as dealers or cashiers,  musicians, singers, disc jockeys and other types of entertainment staff. It also includes ushers, ticket takers and staff who assist in performances.
3. Hospitality & Guest Services — As expected, this section covers bellhops, concierge, hotel staff and housekeeping staff.
4. Home Services — The home services category includes individuals who assist with any type of home maintenance, repair and landscaping, such as electricians, plumbers, installers, appliance repairers, cleaning service workers, locksmiths and roadside assistance helpers.
5. Personal Services — This group includes personal care workers, private event planners, photographers and videographers, pet caretakers, tutors, nannies and babysitters.
6. Personal Appearance & Wellness — This category includes skin care specialists, barbers, hairstylists, cosmetologists, manicurists, eyebrow and waxing technicians, makeup artists, exercise trainers, tattoo artists, tailors and shoe and leather workers.
7. Recreation & Instruction — This category includes golf caddies, recreation instructors, tour pilots and guides, travel guides and sports instructors.
8. Transportation & Delivery — This group includes taxis drivers, workers on charter boats, rickshaw or carriage drivers and movers.

A family letter is a key part of a good estate plan. It is much more personal than many of your estate documents. A family letter allows you to share your heart and show appreciation and gratitude to family members. During a time when family members are grieving, it also helps them to complete many practical steps to protect your property.The family letter may have up to ten different sections. Each section will cover an important but separate topic.

Estate Data

Your estate organizer usually has four parts. It will explain the family names and key information, identify your attorney, CPA and other financial and health advisors, cover all of your assets and financial information and outline your estate planning choices.The estate organizer may be printed or you may use an online version. Your family letter should explain where the information is located. If you are using an online estate planner, it's important for your personal representative to know your account name and password so the information will be available.

Important Documents

Your important documents will generally be safeguarded in three different ways. First, many individuals have a safe deposit box. The safe deposit box typically holds birth certificates, death certificates, degrees and other legal agreements, marriage or divorce documents, military discharge records, property deeds, a personal property inventory, stock and bond certificates and vehicle titles.Second, you may have a fireproof box at home. This box will frequently include your insurance policies, your living will, medical power of attorney or advance directive, trust documents and your will.Third, there are some items that should be left with your attorney, friend, agent or another trusted person. These are items that may be needed while you are still living or will be necessary very soon after you pass away. These documents (or copies of documents) could include your financial power of attorney, a durable power of attorney for healthcare or advance directive, your living will, trusts and your will.

Accounts and Passwords

Because an increasing number of records and information are retained online in personal accounts, you will want to be certain that your personal letter lists all accounts. You may decide to include passwords with the personal letter. Alternatively, if you are entrusting all of this information to a specific person or other location, that should be identified.With the rapid movement to online banking, online mutual funds and securities accounts, donor advised fund accounts, health savings accounts and your email accounts, you may have six to 10 accounts with various passwords. It will be important to have all of this information recorded.

Your Family History

While your estate organizer will include basic information about you and your family members, there is an excellent opportunity in your family letter to discuss your family history. This can include a few short paragraphs that give the names and background of your parents. List all of their children or other key relatives in your family. Your history may discuss marriages, divorces and any blended family relationships. Finally, the family history will show the date of death for persons who have passed away.Family history can include discussions of your activities, interests and career. It enables all of your extended family to have a good picture of your entire life.

Care for Children, Grandchildren or Pets

If you are responsible for any children, grandchildren or pets, this is an opportunity for you to explain your plan for their care. While your estate planning documents will normally appoint guardians for your children or grandchildren who are under your care, it still may be beneficial for the guardian to receive recommendations from you on their education and other areas of development that you understand very well. If someone is to care for pets, you may have recommendations on the way in which that is done.

Memberships

You may have memberships in a number of organizations. Some memberships, such as for a country club or club that purchases sporting event tickets, are transferable to heirs. It would be helpful to your family for you to list any memberships that you have so they can handle them properly.

Care of Your Body

When you pass away, your body may be in the custody of a medical center or nursing home. If you have previously decided to make any organ donations, it is helpful to explain that decision in your family letter. The requirements for making organ donations are typically covered under state law. In many cases, decisions on organ donations are made when you sign your living will or advance medical directive.

Funeral or Memorial Services

The cost of many funerals now exceeds $10,000. If you would like to assist family members in the decisions surrounding your funeral or memorial service, the family letter is an excellent way to do so.First, your family will need to decide whether to have a burial in a cemetery with a casket or to use cremation services and an urn. You may have personal or religious reasons for preferring one or the other.With a casket and burial in a cemetery, your family will generally make use of a funeral home. Because there now is significant competition in the industry, funeral homes are starting to offer advance prices and package services. If you desire a specific range of services, type of casket or prefer not to be embalmed, those directions are helpful to your family.There are funeral consumers\' alliances in many locations. Your family may find assistance and guidance on www.funerals.org. This guidance may help them make good decisions during a very difficult time in the midst of grief over your loss.If you are a veteran, your family may want to contact the Department of Veterans Affairs. You may qualify for a gravesite at no cost in one of the 130 national cemeteries for veterans and their spouses.

Obituary

In your funeral or memorial service, there will be eulogies. It is also customary to have a printed description of your lifetime. This will frequently include your basic history, awards, achievements, military service and lifetime employment. If you have specific requests for information to be included in the obituary, it is helpful to your family to give them guidance. You may have certain principles or values that are important to you that you would like to share through the obituary. This is an opportunity for you to communicate your values to the public.

Final Words and Blessings for Family

Your family letter may conclude with a word of blessing. It is a tradition in many cultures for the elders to provide a blessing for the next generation. This is frequently done when the elder is still living, but certainly your family letter provides a similar way to bless your children, grandchildren, nephews, nieces and other family members.Your final words of wisdom and blessing for family members will be of great comfort as they grieve your loss. It is an appropriate and fitting way to conclude your family letter.

My parent lives alone and has fallen several times over the past few months. Are there any tips or precautions you recommend that I can implement to help prevent this?

The risk of falling is a common concern for millions of elderly seniors and their families. Each year more than 1-in-4 older adults fall, making it the leading cause of both fatal and nonfatal injuries for those age 65 and older. However, many falls can be prevented. Here are some tips that can help avoid further incidents.

Exercising: Reduced muscle strength and poor balance are two of the biggest risk factors that cause seniors to fall. Walking, strength training and tai chi are all good for improving strength and stability. Your parent can also try simple exercises at home like sit-to-stand exercises (sitting down and standing up from a seat without using hands for assistance), standing on one foot for 30 seconds then switching to the other foot, and walking heel-to-toe across the room.

Check medications: If your parent takes any medications that cause them to be dizzy, sleepy or lightheaded, make a list of all the drugs they take, prescriptions and over the counter (OTC), and contact their doctor or pharmacist for a drug review and adjustment.

Numerous medications for blood pressure, anti-anxiety treatments, antidepressants, anti-seizure medications, antipsychotic drugs, diuretics, sedatives, tranquilizers, certain pain relievers and OTC drugs that cause drowsiness are frequently responsible for falls related to medication. 

Get a vision and hearing test: Even small changes in sight and hearing can increase your parent’s risk of falling. As such, it is important to get their eyes checked every year to be sure their vision and eyeglasses are functioning properly. Hearing loss can also double the risk of falling, so have your parent’s hearing checked as well. If they use a hearing aid, be sure it fits well and that they wear it.

Fall-proof the home: There are several simple household modifications to help make your parent’s living area safer. Start by helping them arrange or move the furniture so there are clear pathways to walk through and pick-up items on the floor that could cause them to trip like newspapers, shoes, clothes and electrical or phone cords. If they have throw rugs, remove them or use double-sided tape to secure them.

For the bathroom, use non-skid rugs on the floors and a rubber mat on the floor of the tub or shower. You should also consider having a carpenter install grab bars in and around the tub, shower and toilet for support.

Additionally, ensure the entire house has adequate lighting. Install some affordable plug-in nightlights for the bathrooms and hallways. If the house has stairs, you should also put in handrails on both sides.

For more tips, see the National Institute of Aging’s resource page titled “Preventing Falls at Home: Room by Room” NIA.NIH.gov/health/fall-proofing-your-home.

Choose safe footwear: Going barefoot or wearing slippers or socks at home can also cause falls, as can wearing backless shoes, and shoes with heels or smooth leather soles. The safest option is rubber-sole, low-heel shoes.

Purchase some helpful aids: If your parent requires assistance with balance or walking, consider providing them with a cane or walker.  For an extra level of safety and to provide you with peace of mind, also consider getting a medical alert system with a wearable emergency help button or voice-activated software that allows your parent to call for help if they did fall or need assistance.

To help you evaluate your parent’s future risk of falling, use the National Council on Aging’s “Falls Free CheckUp®” tool at NCOA.org/tools/falls-free-checkup.

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Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of “The Savvy Senior” book. Any links in this article are offered as a service and there is no endorsement of any product.  These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics.  Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.