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At What Age Can A Senior Stop Filing Taxes

A senior couple is sitting at their kitchen counter, working on taxes on their open laptop

The tax season isn’t so bad for those of us who have a tax refund to look forward to. However, many others who owe the Internal Revenue Service money dread this time of year. If so, you might wonder – when can senior citizens stop filing taxes?

There is no specific age at which older adults can stop filing taxes, but it tends to happen to those around age 65, depending on income.

You don’t need to file if your income is under $28,700 if you’re married filing jointly or $14,700 if you’re filing an individual tax return. You also don’t have to file if Social Security payments are your only source of income.

This guide to filing taxes in older age will provide an informative overview to help you make decisions about whether you should file during the current tax year.  

Is There An Age When You Can Stop Filing Taxes?

Are you waiting for a specific birthday so you can stop paying taxes? You might find yourself waiting, and waiting, and waiting.

Why is that? Your freedom from paying taxes doesn’t come with hitting a certain age. Instead, it all depends on the amount of money you make.

We’ll talk about the limit more in the next section, but here’s what it essentially boils down to:

  • You must pay taxes if you make enough money, whether filing an individual income tax return or a joint return. It doesn’t matter whether you’re 25 or 95, that’s the case.

The reason that fewer seniors pay taxes is that they often retire, which can impact their earnings. However, Uncle Sam counts earnings from investments as income, too, which is important to keep in mind.

What is the best month to retire?

So, does that mean you don’t get age-related benefits around tax time? Well, no, not exactly, however you are eligible for increased tax deductions once you turn 65.

If you file alone, your deduction could be as much as $1,850. Married couples get $1,500 in deductions per spouse.

How Much Can Seniors Make And Not File Taxes?

Okay, so let’s talk dollars. What is the total income you can earn in your golden years and avoid tax liability or having to file a federal income tax return?

As of 2023, the amount you could make in the prior year and not file if you’re 65 years of age and older is $14,700 for single filers. If you made $14,701 the prior year, you still must file, but if your earnings amounted to $14,699 or less, you’re okay.

The limit is different for married couples based on their age. If both partners are 65 and up, you don’t have to file if you jointly earned under $28,700 the prior year. If only one partner is 65 and up, the limit is $27,300.

Let’s explore the different sources of income to help you determine if you should file taxes this year.

Pension Taxes

Pre-tax money goes into most pensions, so withdrawing on the pension the year prior means paying federal income tax on that amount the next year.

However, sometimes, employers will pause the taxes until the full pension amount is distributed, and then you would pay taxes on the full amount.

In that case, you could expect to file taxes for many years, possibly the rest of your life.

Retirement Taxes

Do you have a 401(K) or IRA? Your retirement funds might be pre-taxed, in which case, they’re already taken care of.

However, if you must pay the taxes when you withdraw, the time will come to cough up the cash for the next tax year.

Do I Have To File Taxes If My Only Income Is Social Security?

If you’re retired and living off your savings and Social Security income, do you have to file taxes?

Possibly not, however, it’s always best to call your accountant and confirm that you don’t owe any payments for each taxable year. We’ll explain more in the next section.

Do You Have To Pay Federal Taxes On Social Security?

Social Security taxes aren’t always so cut and dried.

For example, you might owe the IRS federal Social Security taxes if you have other retirement income sources outside of your Social Security checks.

In this scenario, you’d pay Social Security benefit income taxes based on your combined income.

Your accountant will calculate your combined income as half of the benefits you receive from Social Security and any adjusted gross income. Nontaxable interest is also added.

  • Per the Social Security Administration website, if you are a married couple and your combined income is between $32,000 and $44,000, you might have to pay for your Social Security benefits at a tax rate of 50 percent. This goes up to 85 percent if your combined income exceeds $44,000.
  • For those filing individual returns, if your combined income is between $25,000 and $34,000, you will pay taxes on Social Security benefits at a rate of 50 percent. That rate climbs to 85 percent if you have more than $34,000 in combined income.
  • Those who are married, but file separate returns will likely have to pay some amount of tax on their social security.

Is There An Age Where You Don’t Pay Social Security Taxes?

You might have heard that at 70 years old, you no longer have to pay Social Security taxes. However, that isn’t the case.

Just as you must file taxes as a senior, if you earn a specific amount, you must pay Social Security taxes if your income exceeds the values above.

Not only may you pay federal taxes on your Social Security benefits but possibly also state taxes, too.

It’s one thing to pay taxes as an adult when you have a reliable income stream, but as a senior solely relying on Social Security as their sole source of income, it’s a lot more difficult.

Thus, many elderly will strategically use their Social Security benefits to minimize taxes and keep their rising costs down.

While the following are viable methods for lowering tax payments, you should still discuss these options with your accountant or financial advisor before you do them.

Use A Tax-Free Retirement Account

Tax-Free Retirement Accounts, or TFRAs, require you to pay taxes when you add money to the account, like a Roth IRA. However, as your funds grow, you don’t have to pay taxes on the increasing amount. The IRS also doesn’t restrict the amount you can withdraw.

TFRAs are a safe source to pull money from, as you don’t have to worry about mounting taxes as your savings grow.

Limit What You Take From Non-Tax-Free Retirement Accounts

If you have a traditional IRA (which does not provide tax-exempt interest) or similar account, you can still use the money in your retirement account after age 59 1/2, but do it carefully.

The less you dip into this account, the fewer taxes you typically pay.

Use Your IRA For Charitable Donations

Funneling your IRA to donations toward a charitable organization can reduce the taxes you pay, as you can deduct the donation.

However, you must make a substantial payment or several smaller donations throughout the year for this strategy to make a dent in your taxes.

Put Your Money In Growth Stocks

Using your money on assets and investments might seem wise, but your increased earnings require you to pay more taxes. A growth stock works differently.

You have to sell the stock before you pay any taxes on it. You can wait to sell until you have more money for taxes.

Use Tax-Loss Harvesting  

The last option is tax-loss harvesting, when you sell your investments at a loss. The losses from the investments offset any investment gains you made. 

Use the money from the sale to reinvest elsewhere to keep your investments going but with less taxable income.

Taking losses is always a gamble, but it can pay off. However, weigh your options carefully before considering tax-loss harvesting.

Bottom Line

There is no one specific age at which a senior can stop filing taxes. Rather, whether you have to file depends on your income from the prior year. If you rely only on Social Security benefits to get by, you typically don’t have to pay taxes.

However, if you combine your Social Security with other income sources (and not necessarily from a job), such as investments or retirement income, you might have to pay taxes.

*NOTE: we are not tax experts and this article is not meant to provide financial or tax advice. Always check in with your accountant or other tax expert if you have questions about your taxes and your unique situation. Assuming you don’t have to pay a tax bill and skipping out on the filing requirement for Federal income taxes is fraud and could result in criminal charges.

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