Do You Have to File Federal Income Tax When You Are Over 70?
Internal Revenue Service rules allow you to have more income before requiring you to file taxes once you reach age 65. Consequently, if you've retired by the time you reach 70, there's a good chance you won't have to file an income tax return. The main factors that determine when you must file are your gross income and filing status, although special circumstances may apply for some individuals. Keep in mind that the amounts change from time to time. You can check IRS Publication 17 at irs.gov for current figures.
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Social Security
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If your income consists of only Social Security, you do not have to file taxes. In addition, Social Security benefits are not included when you determine whether you must file taxes. However, in some cases part of your Social Security benefits may be taxable. To see if this is the case, add one-half of your annual Social Security benefits to your gross income. If the total is $25,000 or more ($32,000 if you are married and file a joint return) then one-half of your Social Security benefits may be taxable.
Gross income
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You must file a tax return when you are 65 or older if your gross income exceeds the threshold amount for your filing status. Gross income includes goods, property and services received as well as money and also profits from a sale of your main residence. If you are single, the threshold was $10,750 as of 2010. For those who are married and filing jointly, the threshold was $19,800 or $20,900 for both spouses. If married and filing separately, $3,650. For head of household, the threshold was $13,450 and for a qualifying widow or widower, it was $16,150.
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Dependants
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Sometimes another person may be able to claim you as a dependant. If so, and you are single and had unearned income of $2,350 or earned income of $7,100, you must file a tax return. If you are married and your unearned income was over $2,050 or your earned income was over $6,800, you must file. If you are legally blind, add $1,400 to the above figures. However, if your spouse filed separately and itemized deductions, you must file if you had at least $5 in gross income, you are a dependent.
Special Circumstances
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There are some special situations when you must file a tax return even when you are age 65 or over even if your gross income is under the applicable threshold amount. This is the case if you owe any uncollected Social Security or Medicare taxes, alternative minimum tax or tax on a health savings account. You must file if you owe taxes on funds from a qualified retirement account or Coverdell educational savings account. Finally, if you have incorrectly received a tax credit and must repay the money you must file a tax return.
Voluntary Filling
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The IRS says there are times when you should file after age 65 even if you don't have to. If you've had taxes deducted from a paycheck, you may be able to get a refund. You should also file if you qualify for any of several tax credits such as the earned income tax credit.
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