We’ve all heard the expression, “Nothing is certain except death and taxes.” While this may sound extreme, there is a lot of truth in that statement. There is no age minimum or limit when it comes to filing a return with the IRS on your earnings. From the cradle to the grave, if your income meets the requisite filing requirements, chances are you will have to pay Uncle Sam at some point. If you’re wondering when you can stop paying taxes, the simple answer is fairly straightforward – when you no longer have income on which to file taxes. However, there are many determining factors as to whether you even need to file taxes at all.
Know Your Filing Status
Knowing your correct filing status will help you find out if you need to file taxes for the year. It is worth noting that for tax purposes, your marital status as of December 31st will be your filing status for the year in which you’re filing taxes. You may find that more than one filing status is applicable to you. In this instance, the IRS cuts you a break and advises taxpayers to file under the status that will allow them to owe the least amount of taxes.
The IRS currently has five filing statuses that are used to determine how much money you have to earn within a tax year before you will need to file taxes:
- Single: This status is reserved for taxpayers who are not married or who are divorced. Legally separated filers also fall under this status.
- Married Filing Jointly: This status is for legally married taxpayers who plan to file a joint return.
- Married Filing Separately: Sometimes, married couples opt to file their tax returns separately. A benefit of this status is that sometimes less tax is owed than if the couple were to file jointly. This status is also used for couples who want to be responsible only for their personal tax obligations
- Head of Household: This status applies to unmarried filers who are responsible for more than half of the cost of maintaining a household for themselves and a qualifying person.
- Qualifying Widow(er) with Dependent Child: This status typically applies to someone whose spouse has died, and who still has a dependent child.
Income Thresholds for Filing
The IRS has certain criteria used to determine whether you have to pay taxes on the income you earn. Not everyone needs to file taxes with the IRS every filing season. Depending on your age, whether you’re being claimed as a dependent on another taxpayer’s return or if your total income doesn’t exceed the standard deduction including one exemption, you may not be responsible for filing taxes. Once you surpass these income thresholds, however, it is your obligation to file and pay taxes.
For the 2016 tax year (filed in 2017), single filers under the age of 65 who earn more than $10,350 and singles over 65 with more than $11,900 in earnings had to file a tax return. Head of household filers under 65 making more than $13,350 and those older than 65 with head of household status plus more than $14,900 in taxable income were also required to file. People who are married, but filing separately, needed to file taxes if their income exceeded $4,050 regardless of age. Lastly, a qualifying widow(er) who is under 65 with dependent children, has income totaling more than $16,650 and those over 65 earning more than $17,900 needed to file a tax return.
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Are My Social Security Benefits Taxable?
Thirteen states tax Social Security benefits, but if you're at the age of retirement and your only source of income is from Social Security benefits, you do not have to file federal income tax on your benefits. If you receive income other than Social Security benefits, then you have to add one-half of the benefits to your other income. If this total is higher than the IRS threshold for filing taxes, depending upon your status, up to 85 percent of your Social Security benefits can be taxable. As of 2017, the thresholds for filing on your benefits are $25,000 for singles and $32,000 for couples who are married and file jointly.
- TurboTax: Does Everyone Need to File an Income Tax Return?
- IRS.gov: Do I Need to File a Tax Return?
- Saving to Invest: 2016-2017 Federal Tax Filing Gross Income Requirements – How Much You Have to Make or Earn to File Taxes
- IRS: Choosing the Correct Filing Status
- Investopedia: Are Social Security benefits taxable after age 62?
- SSA: Benefits Planner: Income Taxes And Your Social Security Benefits