The Daily Money

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Sun Apr 6 2025

Daniel de Visé | Personal Finance Reporter

Good morning! It's Daniel de Visé with your Daily Money, Sunday tax edition. Between now and April 15, we'll be briefing some of our most popular stories about Tax Season 2025.

Today, we'll look at some tax issues that impact older Americans.

Millions of Americans are getting a little extra Social Security cash, but advisers warn it may also mean a little extra taxes.

The Social Security Fairness Act eliminates the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which reduce Social Security benefits for about 3.2 million public-sector retirees who also receive pension income. The law's effective date is retroactive to January 2024, so many beneficiaries are getting a one-time retroactive payment that could amount to thousands of dollars, as well as higher monthly benefits starting this year.

Here's what it means for your taxes.

Which states tax Social Security?

The annual cost-of-living adjustment Social Security recipients receive is both a blessing and a curse.

On the one hand, additional money is welcome. On the other, those extra dollars can boost incomes just enough so beneficiaries have to pay more taxes.

It's not only the federal government that will tax Social Security if total income exceeds certain amounts. Ten states also will levy a tax this year .

How seniors can save big on taxes

It's a good time to be an older American, at least for taxes. There are two items that only older adults can use to save a little this year and, maybe, a little extra next year on taxes.

Americans ages 65 years and older can claim the extra standard deduction this year. Some people aged 60 to 63 can set themselves up now for even more savings in 2026 using super catch-up contributions.

Here are the details.

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