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Tax Credits and Deductions for Seniors and Retirees

Aging represents a major life change; the tax laws for retirees and those above age 65 are slightly different than the laws for other taxpayers.

When can I stop filing tax returns?

If you are younger than 65 years old, you must file a return if your Adjusted Gross Income (AGI) exceeds the following amounts, based on your filing status.

  • Single: $12,000
  • Head of Household: $18,000
  • Married Filing Jointly: $24,000
  • Qualifying Widow(er) with Dependent Child: $18,000
  • Married Filing Separately: $0 ($12,000 if spouse claims the standard deduction)

If you are 65 and older, the amounts are:

  • Single: $13,600
  • Head of Household: $19,600
  • Married Filing Jointly: $25,400 if one spouse is age 65 or older, $26,600 if both spouses are age 65 or older
  • Qualifying Widow(er): $25,300
  • Married Filing Separately: $0 ($13,300 if spouse claims the standard deduction)

If you have $400 or more in self-employment income, you must file a tax return.

Do I need to include my Social Security on my taxes?

Social Security income may be taxable. However, no more than 85% of the total benefits received by you and your spouse are ever taxable.

Social Security doesn’t become taxable until your total income plus half of your benefits exceeds the base amount of $25,000, or $32,000 if you are filing a joint return. Married taxpayers filing separate returns may have to include 85% of their benefits in their taxable income if they lived with their spouse at all during the year.

What is the standard deduction for 2018 for taxpayers 65 and older?

The normal standard deduction, per filing status, is:

  • Single: $12,000
  • Head of Household: $18,000
  • Married Filing Separately: $12,000
  • Married Filing Jointly: $24,000
  • Qualifying Widow(er): $24,000 

However, if you are 65 or older, you may increase your standard deduction by $1,600 if you file Single or Head of Household. If you are Married Filing Jointly and you OR your spouse is 65 or older, you may increase your standard deduction by $1,300. If both you and your spouse are 65 or older, you may increase your standard deduction by $2,600.

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Even if you are retired, you may still need to file a tax return. Consult the income limits above.

What tax credits do seniors receive?

Credit for Dependent Care – If you or your spouse are unable to care for yourself and outside care is needed while the other spouse is working, you may qualify for this credit. The credit is based on a percentage of the amount you pay for care. The credit is based on a percentage of your qualified expenses up to $3,000 for one person and $6,000 for more than one person. The maximum credit for the care of one qualified person is $1,050. The maximum for two or more qualifying persons is $2,100. The credit is available for all taxpayers regardless of their income.

Child Tax Credits – If you have a dependent child or children under age 17, you may be able to claim the $2,000 Child Tax Credit for each child. You may also be eligible for the Additional Child Tax Credit – up to $1,400 per child of the unused credit may be part of your refund if it isn’t used to reduce your taxes to zero.

Credit for Other Dependents (ODC) – If you have a dependent who is over 17 you may be eligible for the new credit for other dependents.  This credit is available to taxpayers with dependents who no longer qualify for the child tax credits.  The credit is a $500 per dependent, nonrefundable credit and can reduce your taxes to zero.

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