Tag Archives: Do Senior Citizens Have to Pay Taxes?

Updated For Tax Year 2021

You can stop filing income taxes at age 65 if:

• You are a senior that is not married and make less than $14,250
• You are a senior that is married, and you are going to file jointly and make less than $26,450
• You are a qualifying widow, and earned less than $26,450

The IRS will want you to file a tax return when your gross income surpasses the total of the standard deduction for your filing status, in addition to one exemption amount. These filing rules will still apply to senior citizens who are living on their Social Security. However, if you are a senior, you don’t consider your Social Security income as gross income. If Social Security is your only source of income, then you won’t need to file a tax return.

When Seniors Must File Taxes

For the tax year 2021, you will need to file a tax return if you are not married, at least 65 years of age, and your gross income was $14,250 or higher. But, if you live on your Social Security benefits, you don’t include this in your gross income according to TurboTax. If this is solely the income you receive, then your gross income comes out to zero, and you won’t have to file a federal income tax return. But if you do earn additional income that is not exempt from being taxed, then each year you must figure out whether the total exceeds $14,250.

For previous tax years, these amounts are based on the year’s standard deduction, in addition to the exemption amount for your filing status and age. For tax years after 2018, only the standard deduction is used because exemptions are no longer used in calculating your taxable income under the new tax law passed in the latter part 2017.

When you and your spouse are 65 years of age or older and married and are going to file a joint return, you have to file a return if your joined gross income exceeds $27,800 or more. When your spouse is under 65 years old, the threshold amount diminishes to $26,450. Bear in mind that these income thresholds only apply to the 2018 tax year, and usually increase somewhat each year after.

When To Include Social Security In Your Gross Income

There are certain circumstances when seniors must add their Social Security benefits in their gross income. If you are married and file an individual tax return and reside with your spouse during the year, 85% of your Social Security benefits are deemed gross income which may warrant you to file a tax return. Additionally, an allotment of your Social Security benefits are included in gross income, no matter your status, in any year the total of half your Social Security including all other income, tax-exempt interest, exceeding $25,000 or $32,000 if you are married and filing jointly.

Tax Credits For Seniors

Even if you have to file a tax return, there are ways you can decrease the amount of tax you will pay on your taxable income. So long as you are a minimum of 65 years old and your income from sources other than your Social Security is not high, then a tax credit for seniors, the elderly or disabled, can lessen your tax bill on a dollar-for-dollar arrangement. Nevertheless, this tax credit is only useful when you truly owe tax to the IRS.

What Age Do You Stop Paying Taxes on Social Security?

You can stop paying taxes on Social Security at 65 years old as long as your income is not high. According to TurboTax, “As long as you are at least 65 years old and your income from sources other than Social Security is not high, then the tax credit for the elderly or disabled can reduce your tax bill on a dollar-for-dollar basis. However, this tax credit is only useful when you actually owe tax to the IRS.”

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