4 Ways Retirees Can Reduce Taxes on Social Security Income in 2026

If you’re a new retiree, you might be surprised to learn that your Social Security benefits can be taxable. Depending on your retirement income, up to 85% of these benefits could be taxed by Uncle Sam.

Fortunately, there are legal ways to reduce how much you’ll owe on your Social Security Income.

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Consider Moving To an Income Tax-Free State

Many retirees use their newfound freedom as an opportunity to move somewhere new. For some, it’s to be closer to family and for others it’s to move somewhere they’ve always wanted to live.

If you’re planning to move, it’s possible to eliminate the taxes on your Social Security benefits by choosing a state that has no income taxes. These states include:

• South Dakota

• Washington

• New Hampshire

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Minimize Withdrawals From Retirement Accounts

When you withdraw money from a traditional IRA or 401(k), it counts as income in the year it’s withdrawn, increasing your Adjusted Gross Income (AGI). If you’re at a point where you need to take Required Minimum Distributions (RMDs), you won’t be able to avoid these withdrawals. But if you’re younger, you have options.

Withdrawals from Roth IRAs and Roth 401(k)s don’t count as income. By prioritizing withdrawals from these accounts over traditional accounts, you can keep your income low.

Consider a Roth Conversion

If you expect to be in a higher tax bracket once you retire, you might consider a Roth conversion. This allows you to move money from a tax-deferred retirement account into a Roth account. While you’ll be required to pay income taxes today, they’ll be lower than the taxes you’d pay when withdrawing in retirement at a higher tax bracket.

Consider Charitable Giving

If you’re in a position to make charitable donations, they can help you offset income and reduce your tax liability. Typically, you’ve needed to itemize your taxes to claim a charitable deduction, but starting in 2026, those taking the standard deduction can deduct $1,000 when filing single and $2,000 when married filing jointly.

Another strategy for anyone 70.5 or older is to make a charitable donation directly from your IRA, known as a Qualified Charitable Distribution (QCD). Although it doesn’t qualify as a tax deduction, it counts toward your RMD for the tax year.

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