When Does a Senior Citizen on Social Security Stop Filing Taxes?

If you are unmarried and at least 65 years of age, then you must file an income tax return if your gross income is $11,200 or more. However, if you live on Social Security benefits, you don't include this in gross income. If this is the only income you receive, then your gross income equals zero, and you don't have to file a federal income tax return. But if you do earn other income that is not tax-exempt, then each year you must determine whether the total exceeds $11,200. If you are married and file a joint return with a spouse who is also 65 or older, you must file a return if your combined gross income is $21,800 or more. If your spouse is under 65 years old, then the threshold amount decreases to $20,650. Keep in mind that these income thresholds only apply to the 2012 tax year, and generally increase slightly each year.

There are certain situations when seniors must include their Social Security benefits in gross income. If you are married but file a separate tax return and live with your spouse at any time during the year, then all of your Social Security benefits are considered gross income which may require you to file a tax return. In addition, a portion of your Social Security benefits are included in gross income, regardless of your filing status, in any year the sum of half your Social Security plus all other income, including tax-exempt interest, exceeds $25,000 or $32,000 if you are married.

Even if you must file a tax return, there are ways you can reduce the amount of tax you have to pay on your taxable income. As long as you are at least 65 years old and your income from sources other than Social Security is not high, then the tax credit for the elderly or disabled can reduce your tax bill on a dollar-for-dollar basis. However, this tax credit is only useful when you actually owe tax to the IRS.