Do you have to file taxes at over 65 years? Or is there an age you no longer have to file income tax?
The Internal Revenue Service (IRS) requires anyone who owes taxes to file a return as well as anyone who makes over a certain amount of earned income annually. And while your income tax after age 65 may decrease as your income decreases, the requirement to pay taxes is still there.
However, the way you file your return may change as you age, because your income sources will change.
No Tax Exemption for 65+
The reality is that there is no age limit for filing an income tax return. However, while there are no age 65 tax credits, you will only have to file a return if your gross income is more than the annual minimum threshold established by the IRS.
Your filing status determines which limit applies, so the limits will be different if you're single rather than married. In addition, you are married but filing your taxes separately from your spouse, you will have different limits from people who belong to the previous two filing statuses.
Of course, if you are due a refund because you had payroll taxes deducted or are entitled to a tax credit, you'll want to file anyway. The limit amounts change yearly because of inflation, and your age doesn't matter.
Some Must File Despite Income
You must file a tax return in some circumstances even if you don't meet the income threshold. If you're over 65 and take taxable distributions from a retirement account, such as a traditional IRA, you must file a return.
Filing also is required if you received advance premium credit for health insurance bought via a Health Insurance Marketplace, or if you had self-employment income of $400 or more. You'll also need to submit a return to the IRS when you owe alternative minimum tax or unpaid income tax, Social Security tax or Medicare tax.
For many over 65, Social Security benefits aren't taxable and don't count as income for tax filing purposes. However, if you have enough income from other sources, part of your Social Security benefits may be taxable and you will have to report the taxable portion to the IRS.
To check if this rule applies to you, divide your annual Social Security benefit in half. Add the result to other income. If you file as single and the total tops $25,000, some Social Security benefits might be taxable. For couples filing jointly, the threshold is $32,000.
Read More: Do You Pay Taxes on Social Security?
2021 Filing Requirements
A few things changed during the 2021 tax year, including the income tax filing requirements for over 65:
- If you're single and your earned income and adjusted gross income both exceed $12,550 (the standard deduction), you must file a tax return. This is true no matter how old you are.
- If you're married and file a joint tax return, and you live in the same house as your spouse, you must file that joint tax return if your combined earned income and AGI each exceed $25,100, regardless of age.
- If you qualify as a head of household, you should file taxes if you earn at least $18,800.
Some Ways to Cut Taxes
Seniors with limited incomes may qualify for the elderly or disabled tax credit. Here are some additional tax breaks people age 65 and older often qualify for:
- Medical and dental costs: Qualified out-of-pocket medical expenses in excess of 7.5 percent of your adjusted gross income are deductible if you are 65 or older.
- Tax-exempt profits from sale of a home: As long as you've lived in a home for two of the last five years, the first $500,000 in profit from sale of the property is tax-exempt for married couples filing a joint return. The exemption for singles is $250,000. And you don’t need to report that sale on your tax return.
- Roth IRA distributions: Unlike distributions from traditional IRAs, qualified withdrawals from a Roth IRA are tax free.
As a senior, you may also be eligible for earned income tax credit, which is usually available to qualified low- and mid-income workers. But you must be caring for qualifying child to get the credit.
- IRS.Gov: Do I Need to File a Tax Return?
- IRS.Gov: Filing Status
- IRS.Gov: Publication 590-B (2020), Distributions from Individual Retirement Arrangements (IRAs)
- IRS.Gov: The Health Insurance Marketplace
- SSA.Gov: Income Taxes And Your Social Security Benefit
- IRS.Gov: IRS provides tax inflation adjustments for tax year 2021
- IRS.Gov: Tax Guide for Seniors
- IRS.Gov: Qualifying Child Rules
Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.