[ton80]

Originally Posted by Plinker

The 2025 standard deduction for a married couple filing jointly, age 65 or over, is $34,700. The BBB (Big Beautiful Bill) adds an additional $6,000 per person for these seniors. This increases the standard deduction to $46,700. SS benefits are tax-free if your AGI is under $150,000 if filing jointly.
Let’s assume that this couple has $20,000 in income from taxable sources such as a savings account, CD, etc. and combined SS benefits of $60,000. Since none of their SS is taxable, could they not take an IRA distribution or RMD in the amount of $26,700 ( $46,700 - $20,000) and pay no taxes as their AGI would now be $46,700?
Or, and this is where it gets really interesting, what if they took distributions up to the 10% tax bracket? This bracket goes up to $23,850 for 2025. This would allow a distribution of $50,550 ($26,700 + $23,850) with a tax bill of only $2,385.
You can make a reservation at Stirrups in Ocala if you continue into the 12% tax bracket. In my example, a $100,000 distribution would put you right at the $150,000 AGI amount before your SS would be taxable ($20,000 taxable + 1/2 SS of $60,000 is $30,000+ $100,000 distributions = $150,000). Your tax would be based on an AGI of $73,300 ($120,000 - $46,700) or about $8,300.
Sorry for all the math, but this could be a huge boost for seniors, depending on your numbers.
Okay, math gurus, where did I mess up?

SS Income is NOT Tax Free. There is only a temporary tax deduction of 12 K$ for couples. The deduction expires in 2028. That is where you messed up. The criteria of AGI less than 150k is for the deduction only.