This is How to Make Your Social Security Tax Free

In today’s video, we’re gonna show you how you can potentially make your Social Security income 100% tax-free. We’re also gonna show you common mistakes that occur that could cause more of your benefits to be lost to taxation, which means less income for your retirement.

As always, my goal is not to just show you this, but to help you understand it. So in order to help you learn it and understand it, we have to start with some very basic terms of how the IRS calculates what part of your Social Security benefits is potentially subject to taxation.

So as I go through these, don’t be intimidated. If you’re not a tax person, we’re gonna have some examples in the midpoint of this video where it’s gonna kinda all bring it home and help you really see it and hopefully learn what all of this more technical stuff here kind of means.

But we’re gonna keep it high level, super simple, and you’ll have the facts.

Step 1: Calculating Provisional Income

First thing we have to do is calculate your provisional income.

In retirement, your income is typically gonna be comprised of IRA withdrawals, your investment income, maybe a pension.

So that’s the first step — calculate the gross income. Then we add in any non-taxable interest like muni bonds. And then finally, we add one half of our Social Security benefits. So we add all this together and then we get our provisional income.

A quick note about municipal bonds:
Even though municipal bonds are federally income tax-free, the interest they pay must often be added back into your total income for accounting purposes. This can increase your provisional income (or what’s known as your modified adjusted gross income).

This can have ripple effects across many aspects of your retirement — such as potentially increasing the tax you pay on investment income, your Medicare premiums, and more.

So that’s step one: determine your provisional income.

Step 2: Compare to IRS thresholds for singles and couples

Now we have to compare that provisional income to the thresholds — whether you’re single or married filing jointly — that the IRS gives us.

You don’t have to memorize these; here’s a link to a blog post on our website where we’ll have all of this written down so you can easily reference it in the future.

If you’re single:

• Less than $25,000 provisional income → 0% subject to tax

• $25,000–$34,000 → up to 50% of your benefits may be taxed

• Over $34,000 → up to 85% may be taxed

If you’re married filing jointly:

• Less than $32,000 → 0% subject to tax

• $32,000–$44,000 → up to 50%

• Over $44,000 → up to 85%

One important note: those numbers — 0%, 50%, and 85% — are not tax rates. They represent the portion of your benefits that may be taxable. And it’s not a flat 50% — it’s gradual. For example, if your provisional income is $28,000, maybe around 43–45% of your benefits would be taxable.

Real-world example: Married couple, 67 years old

We’ve gone through Step One and Step Two. Now let’s use a real-world example.

We have a married couple, 67 years old, with $40,000 of Social Security income and $20,000 of IRA withdrawals.

Question: How much is their gross income, and how much is their provisional income?

Hopefully you took a second to think that through.

We take the IRA withdrawals plus one-half of the Social Security benefits:

• $20,000 + $20,000 = $40,000 provisional income.

Now, pop quiz number two — what percentage of your Social Security benefits are now subject to income tax?

Step 3: Subtracting Standing Deduction from your Adjusted Gross Income (AGI)

You have to go back to Step Two and compare that provisional income to the thresholds.

In our example — a married couple with $40,000 provisional income — that falls into the up to 50% category.

So:

• $20,000 IRA withdrawals

• 50% of $40,000 Social Security benefits ($20,000)

That gives us an adjusted gross income (AGI) of $40,000.

Standard deductions for 2025

Now we take that AGI and subtract out deductions — typically the standard deduction.

For 2025, here’s a summary (also linked in our blog):

• Married couple over 65: base standard deduction of $31,500

• Each spouse over 65: additional $1,600 each

• Senior bonus deduction: $12,000 (for those 65+)

This means:

• If one spouse is 65+, standard deduction = $45,100

• If both are 65+, standard deduction = $46,700

If your AGI is $40,000 and your deduction is $46,700, your taxable income is zero.

That negative income doesn’t carry forward or produce a refund — it simply means you owe no federal tax.

Understanding your retirement income “pie”

Now, let’s look at the bigger picture — your retirement income pie.

Most people in retirement have income from multiple sources:

• Non-qualified investments (savings, brokerage accounts)

• Pensions

• IRA withdrawals

• Social Security

For example, your income pie might look like this:

• 10% from non-qualified investments

• 20% from a pension

• 30% from IRA withdrawals

• 40% from Social Security

The larger your taxable sources — like pensions and IRA withdrawals — the more likely your Social Security benefits are to be taxed.

Pensions are great for stability but bad for tax flexibility, because they can push more of your Social Security into the taxable range.

That’s why we look not just at today’s taxes, but at how decisions impact your future income and tax situation.

Strategies to keep more of your Social Security tax-free

This is where planning comes in.

You have to decide:

• When to take Social Security

• How much to withdraw from retirement accounts

• Whether to convert to a Roth IRA

• When and how much to draw from non-qualified accounts

Each of these choices affects your taxes, income, and future flexibility.

When you can see the impact of these variables — Social Security timing, withdrawal strategies, conversions, non-qualified income — you gain what we call visibility.

That’s the foundation of our Retirement Success Plan.

At Oak Harvest, that’s what we do: create visibility so you can make better retirement decisions and keep more of what you’ve earned over time.

These are the elements that lead to a successful retirement — by putting more money in your pocket and paying less tax over time.

➡️ Our team at Oak Harvest Financial Group helps retirees and pre-retirees build a comprehensive Retirement Success Plan, combining investment management, tax strategies, and income planning to help you enjoy more of your retirement income with confidence. 📞Call us at (877) 404-0177 or fill out this form for a free visit: https://click2retire.com/social-security-less-tax