Many years ago, the U.S. Internal Revenue Service performed a study to find out where they were losing money from taxes. Not surprisingly, they learned the issue fell in the 80\/20 Rule. That is, 80 percent of the losses were from the top 20 percent of filers. They found that the 80-percent majority of people were working and their employers were withholding more than their employees actually owed. Thus, the government was able to use the over-payment amounts until April of the following year without a cost. The biggest losses were the top 20 percent of people who failed to pay what they owed, hoping to get away with it.<\/p>\n
This study matters because it shaped how the IRS sets filing requirements today. The agency realized that requiring every person to file wasn’t efficient and decided to create clearer thresholds, focusing on those most likely to owe additional tax. For expats and seniors, this means your requirements depend on your specific situation, not just a blanket rule for everyone.<\/p>\n
The IRS also found that it required a massive overhead to open all those returns only to find out that the cost was much higher than the return. So, the IRS set in place rules to lower the overhead by not requiring everyone to file a tax return.<\/p>\n
Whether you must file depends entirely on your total gross income, your filing status, and the types of income you receive. For example, if you are single, age 66, and you receive $14,000 from Social Security and $3,000 from a small pension, your gross income is $3,000 because Social Security is generally not counted. In this case, your income would be below the filing threshold, and you likely would not have to file. Another example: If you are married filing jointly, both age 67, and you receive $20,000 in Social Security and $22,000 from other retirement income, your gross income would include the $22,000 and possibly part of your Social Security depending on the total, so you may need to file. Using specific examples can help you determine your own filing needs.<\/p>\n
While the IRS does not use age to excuse people from taxes, turning 65 does grant you a higher standard deduction, meaning you can earn more money before you are required to file. Once you turn 65, the IRS provides a higher income threshold before requiring you to file a tax return.<\/p>\n
If you are 65 or older and filing as Single, you generally do not need to file a tax return if your gross income is less than US$18,150 (US$1,512.50 per month).<\/p>\n
Furthermore, if Social Security is your only source of income, you typically do not have to file a tax return at all, regardless of your age. That is correct. If you receive Social Security as your sole source of income, you don’t need to file a tax return. However, if you have other income, you may need to file. Common types of other income include pensions, distributions from retirement accounts like IRAs or 401(k)s, wages, rental income, self-employment earnings, dividends, and interest from bank accounts or investments. If you receive any of these in addition to Social Security, it’s important to review your filing requirements.<\/p>\n
To check if you need to file a U.S. tax return, visit the official U.S. IRS Government website. The IRS tool is simple to use and will ask you a few questions about your age, filing status, and the types and amount of income you receive. You should have information on hand about your sources of income, such as Social Security, pensions, retirement accounts, wages, or other earnings. The tool will guide you step by step, so you can easily find out whether you need to file a tax return this year.<\/p>\n
To check if you need to file a U.S. tax return visit the official U.S. IRS Government website:<\/p>\n