The population of older adults in the United States receiving monthly retirement payments is growing. This is an essential benefit for millions of people who are unable to work due to their age or physical disability. Therefore, they must know the tax responsibilities they have with the IRS in their case.
This is essential since many tend to get confused about whether or not to file taxes for the money they collect from Social Security. However, this issue is a little more complex than it seems. For that reason, here at The Look, we bring you the help you need. We will teach you how taxes apply to older adults.
Do seniors who collect from Social Security need to file a tax return?
Like any other U.S. citizen or legal resident, seniors must file taxes. This applies when half of the retirement benefits and other additional income exceed a certain limit. In such a case, a tax return must be made, regardless of the age of the person in question.
About this limit, it may vary depending on the situation of the citizen. Single people are capped at $14,850, while married couples are capped at $28,700. If the income is below that figure, then they will not have to file taxes. The same goes for those who only have Social Security income.
However, keep in mind that you may still have to file state taxes under your state's laws. Therefore, you should check with the appropriate authorities regarding the tax rules you have to abide by. In this way, you can make sure you do not make any mistakes when filing taxes.
How can seniors who collect from Social Security meet tax obligations?
It is recommended to review in detail the tax situation in which you find yourself, to prevent legal problems. For this, you can consult a tax professional or seek help from local organizations. Most likely, with the first option you will have to spend money, while the second is usually free.
On the other hand, you can also meet your tax obligations with free assistance from the IRS, which offers the following options:
- Voluntary Assistance Program for Low and Moderate Income Taxpayers (VITA)
- Tax Counseling Program for the Elderly (TCE)
With any of these social programs, you can make your tax return without any problem. In addition, it will allow you to avoid penalties or fines by the IRS. At the same time, these resources are of great relevance to keep you abreast of any tax adjustment or novelty.
What are the tax consequences of not declaring Social Security income for seniors?
Not filing taxes is a criminalized crime in all U.S. states, regardless of the age of the senior. In particular, when it must comply with these obligations, for the reasons mentioned in advance. In general, such situations entail a monetary penalty that is determined arbitrarily in each particular case.
In addition, the IRS may audit you on all your accounts and assets. Therefore, you will have additional interest charges and penalties to pay. This is something that can affect your quality of life in multiple aspects.