Taxes are not terribly exciting, and the simple truth is that most of us would rather skip them if we could. For senior citizens, there are some pretty exciting opportunities that permit you to skip the entire process of filing taxes—but this isn’t a one-size-fits-all situation. Plenty of people of all ages are required to file taxes, even some individuals in their nineties! To help you understand when you can stop filing a tax return, we made this simple guide.
What Role Does Age Play in Taxes?
The idea that age and taxes are somehow related is actually a fairly common misconception, though it might influence how you file. The truth is that there is not a specific birthday that will get you out of taxes. If there were, there would be some very wealthy senior citizens making a lot more money without having to pay any taxes at all.
The reason that we have the belief that age exempts certain individuals from paying taxes is actually linked to certain lifestyle changes and milestones. The individuals who are older and do not have to pay taxes are not exempt from paying taxes because of their age, but rather their amount of taxable income.
Senior Citizens and Tax Exemptions
In order for senior citizens to be exempt from filing taxes, they must fall below certain income thresholds just like everyone else. These thresholds can vary from one year to the next in some cases, so it is important to always keep an eye out for what they are to remain within compliance. If you do not have taxable income that exceeds the threshold, you will be exempt from paying taxes. When determining your income, remember that social security does not count as taxable income. Individuals who live on social security alone are not required to file their taxes like others.
Filing Rules for Singles and Couples
The filing rules and thresholds differ depending on your age and marital status. The threshold for a single person over the age of 65 is generally about half what it is for couples. For 2020, the threshold for someone meeting these requirements was $14,050.
Couples are naturally expected to make more together, which is why the threshold changes. It now applies to the married couple instead of just the individual. For 2020, this threshold was $27,400 for two individuals over 65. However, this number actually lowers if one spouse is under the age of 65, so it is important to keep this in mind.
Determining Your Tax Eligibility
When determining whether or not you should file taxes, it is always safest to work with a professional. There are certain instances where Social Security benefits are considered taxable income, particularly if you are filing separately while living with your spouse. To ensure that you are making the correct choice, it always helps to have a professional sort through your income and what will be applied for your taxes. Fortunately, tax professionals will also know how to find the most beneficial deductions as well.