House Republicans have introduced two new bills to help senior citizens save on taxes, following former President Donald Trump’s tax reform goals. If these bills pass, they would make more Social Security income tax-free and offer extra tax deductions for older Americans.
Representative Nicole Malliotakis (R-N.Y.) introduced the “Bonus Tax Relief for America’s Seniors Act” and the “Tax Relief Unleashed for Seniors by Trump (TRUST) Act” on Monday. These bills aim to lower the tax load on seniors, especially since they have been hit hard by rising prices and inflation recently.
Key Takeaways
House Republicans have rolled out two new bills designed to deliver tax cuts for senior Americans, aiming to ease their financial burdens amid rising inflation.
- The Bonus Tax Relief for America’s Seniors Act offers extra tax deductions ranging from $5,000 to $10,000 for Americans aged 65 and older.
- The Tax Relief Unleashed for Seniors by Trump (TRUST) Act boosts the portion of Social Security income that stays free from federal taxation.
- These bills echo former President Donald Trump’s objectives and are part of a broader GOP effort to support working-class Americans.
Increased deductions and social security tax relief
The Bonus Tax Relief Act is a plan from both political parties that offers new tax breaks for senior citizens. If you’re a married couple or individual over 65 receiving Social Security, you could get extra tax deductions between $5,000 to $10,000. This change helps seniors keep more retirement savings and pay less in taxes.
On the other hand, the TRUST Act aims to increase the amount of Social Security money that isn’t taxed by the federal government. Right now, singles can exclude up to $25,000 from taxes, and married couples can exclude $32,000. If the TRUST Act becomes law, these limits will rise to $50,000 for singles and $64,000 for married couples. This will mean less tax on Social Security benefits, giving seniors more money to spend.
Malliotakis’ rationale for the bills
Representative Malliotakis emphasized that seniors should hold onto more of their money, especially as living costs go up.
Our seniors have worked hard and paid taxes throughout their lives. They should keep more of their Social Security and retirement income without the government taking more, Malliotakis said.
She also noted how rising prices have made it difficult for retirees to manage their savings. Many seniors are struggling with inflation and need to stretch their retirement funds more than before, Malliotakis mentioned. The bills she is introducing aim to reduce taxes for seniors, allowing them to keep more money and enjoy greater financial security in retirement.
Trump’s influence on tax policy
The introduction of these bills follows former President Trump’s ongoing efforts to change tax laws significantly. Since leaving office, Trump has encouraged Republican lawmakers to achieve key goals from his past campaigns, such as removing taxes on tips, overtime pay, and Social Security benefits.
Trump has also pushed for the Tax Cuts and Jobs Act of 2017 to be made permanent. This important law, introduced during his presidency, lowered corporate tax rates, reduced individual tax brackets, and increased the standard deduction for most people. These changes are set to expire in 2025, but Trump and his Republican supporters want to extend them indefinitely.
The new bills introduced by Malliotakis reflect Trump’s larger plan for a tax system that benefits seniors and working-class Americans. These proposals aim to lighten the financial load on older citizens and match the former president’s goal of reducing federal taxes for everyone.
Broader GOP tax agenda
The drive to offer tax relief for seniors is part of a bigger tax plan being developed by House Republicans. Speaker Mike Johnson (R-LA) is working to bring several important tax ideas into one large, comprehensive bill. This new legislation is expected to include Trump’s goals, like tax breaks for seniors, stronger border security, and changes to the energy industry.
Last week, Senate Republicans shared a budget plan that supports these goals. While we’re still learning details about the entire plan, the inclusion of Malliotakis’ bills shows a dedication to helping elderly Americans with their financial challenges.
Economic context and senior financial struggles
The proposed tax cuts come at a time when many older Americans are struggling with rising living costs due to inflation. According to the Bureau of Labor Statistics, prices for essentials like food, housing, and medical care have been increasing steadily. For retirees on fixed incomes, these increases can be particularly challenging.
Social Security provides a crucial safety net for millions of older Americans, but it hasn’t always kept up with inflation. Although there is an annual cost-of-living adjustment (COLA) for beneficiaries, these increases often don’t cover the rising expenses. The proposed act and the TRUST Act could offer much-needed financial relief.
Potential impact on seniors
If these bills are passed, they could help millions of seniors across the US. Raising the Social Security exemption could especially help those with moderate incomes by reducing or even eliminating their federal taxes.
For instance, currently, a married couple earning $40,000 a year from Social Security might have a large portion of their income taxed. By increasing the exemption limit to $64,000, many families like this could pay less in taxes or none at all, freeing up money for things like daily living costs and healthcare.
Moreover, the additional deductions from the Bonus Tax Relief bill would lower taxable income even more, offering further savings. This is particularly beneficial for seniors who rely on Social Security and other retirement income, such as pensions or IRAs.
