How to pay zero taxes on Social Security — and it’s got nothing to do with Trump’s promises. Take 5 simple steps now

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Despite his promises on the campaign trail in 2024, President Donald Trump has not yet eliminated taxes on Social Security. There are new deductions for some seniors above a certain age (65), below a certain level of income ($75,000 for singles and $150,000 for married couples) and available for a limited time (until 2028).

That’s a lot of “ifs,” and there’s a tax bill to pay for anyone who doesn’t meet those criteria, according to the Center for Retirement Research at Boston College (1).

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But that bill isn’t inevitable. There are several ways to lower or even eliminate your tax burden on Social Security that have nothing to do with the president’s policies.

Here are five steps you can take now to start chipping away at your bill.

Step 1. Pull from Roth IRAs, not traditional accounts

The Social Security Administration uses provisional or combined income to determine your tax liability, according to T. Rowe Price (2). This is “essentially half of your Social Security benefit plus other income, such as retirement plan distributions and any interest earned on municipal bonds.” Once you’re above a certain level of provisional income level, your Social Security benefits can then be taxed as well.

However, Roth IRA withdrawals never touch provisional income, according to Nationwide (3). Routing your retirement income through a Roth first, instead of a traditional IRA or 401(k), can keep that formula artificially low by design, not by accident.

Step 2. Convert before you claim, not after

Since Roth IRA withdrawals don’t count towards provisional income, it makes sense to execute your Roth conversions before you claim Social Security benefits. This is especially important if you have sizable balances in retirement accounts such as a traditional IRA or 401(k) plan.

Convert them early, take the tax hit on the conversions and create a large Roth balance that you can withdraw in retirement without making your benefits taxable.

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Step 3. Send RMDs to charity

Beyond a certain age, the IRS (4)compels you to take withdrawals from your retirement accounts. These required minimum distributions (RMDs) land squarely in your provisional income, potentially exposing your Social Security benefits to taxes.

Roth conversions, as mentioned above, can reduce this risk. But if you reach your 70s with sizable retirement account balances, there is another solution: charity.

A qualified charitable distribution (QCD) is a direct, tax-free transfer of funds from an individual retirement account (IRA) to a qualified charity. According to Fidelity (5), this transfer can be used to satisfy your RMD while avoiding the tax implications.

To be fair, Roth conversions and QCDs are both sophisticated maneuvers that could be better executed if you have professional help. Hiring an experienced tax advisor or financial planner from the Advisor.com network could put you in a better position to plan and deploy these moves.

The platform does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.

Just enter a few details about your finances and goals, andAdvisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.

Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s whyAdvisor.com lets you set up a free initial consultation, with no obligation to hire, to see if they’re the right fit for you.

Step 4. Use Tax-loss harvesting

Selling some investments at a loss to offset capital gains taxes on winners is standard portfolio hygiene. But this tactic becomes even more valuable when you’re trying to minimize taxes on benefits.

These tax loss deductions can reduce your adjusted gross income (AGI), effectively reducing your tax bill on Social Security benefits, according to AARP (6). Strategically planning your investments can help you achieve this in the most efficient way.

Step 5. Don’t assume municipal bonds are a free pass

Municipal bonds or munis are famously “tax-free.” However, this only applies to federal income taxes.

In fact, the SSA explicitly says it includes any “tax-exempt interest income” in the combined income calculation it uses. That means if your portfolio is heavily reliant on interest from munis, you could be at risk of having a portion of your benefits taxed.

If your portfolio is muni-heavy, you could consider diversifying into hard assets that have the potential to appreciate over time but do not provide regular interest or dividend income. Gold, for instance, could serve as a safe haven for your cash without generating taxable cash flows. The logic here is simple: unlike fiat currency, gold can’t be printed at will by central banks and has an inherently limited supply.

Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.

With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.

If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see ourethics and guidelines.

Center for Retirement Research at Boston College (1); T. Rowe Price (2); Nationwide (3); Internal Revenue Service (4); Fidelity (5); AARP (6)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.