Dear wise senior,
What is the standard IRS tax deduction for 2021? I did not file a tax return last year (2020) as I lost my job and income in March due to COVID. But I got a part time job in 2021 and I wonder if I have made enough money that requires me to file this year.
— Part-time retiree
Whether or not you are required to file a federal tax return this year depends not only on how much you earned last year (in 2021), but also on the source of that income, as well as your age and your declaration status.
Here’s a look at this tax season’s IRS tax filing requirement thresholds. For most people, it’s pretty simple. If your 2021 gross income — which includes all taxable income, not including your Social Security benefits, unless you’re married and filing separately — was below the threshold for your filing status and age, you may not have to file. But if it’s over, you will.
- Only: $12,550 ($14,250 if you are 65 or older on January 1, 2022).
- Married filing jointly: $25,100 ($26,450 if you or your spouse are 65 or older; or $27,800 if you are both over 65).
- Groom filing separately: $5 at any age.
- Head of household: $18,800 ($20,500 if age 65 or older).
- Eligible widow(ers) with dependent child: $25,100 ($26,450 if age 65 or older).
For a detailed breakdown of federal reporting requirements, as well as taxable and non-taxable income information, call the IRS at 800-829-3676 and ask them to send you a free copy of “1040 and 1040-SR for the 2021 tax year”. or you can get it online at http://IRS.gov.
Check here too
You should also be aware that there are other financial situations that may require you to file a tax return, even if your gross income is below the IRS filing requirements. For example, if you earned more than $400 from self-employment in 2021, owe special taxes like alternative minimum tax, or get premium tax credits because you, your spouse, or a dependent are enrolled in a market health insurance plan, you’ll need to file.
You will also need to file a return if you receive Social Security benefits and half of your benefits plus your other gross income and any tax-exempt interest exceeds $25,000, or $32,000 if you are married and filing jointly.
To understand all of this, the IRS offers an online tax tool that asks a series of questions that will help you determine if you are required to file or if you must file because you are entitled to a refund. It takes about 12 minutes to complete.
You can access this tool at http://IRS.gov/Help/ITA – click on “Should I file a tax return?” Or you can get help over the phone by calling the IRS Helpline at 800-829-1040.
Check your status
Even if you’re not required to file a federal tax return this year, don’t assume you’re also exempt from filing state income taxes. Your state’s rules may be very different. Check with your state tax agency before concluding that you are fully in the clear. For links to state tax agencies, see http://taxadmin.org/state-tax-agencies.
Assistance in the preparation of tax returns
If you find that you need to file a tax return this year, you can file it with the IRS for free at http://IRS.gov/FreeFile if your 2021 adjusted gross income was less than $73,000.
Or, if you need help, contact the Tax Counseling for Seniors (or TCE) program. Sponsored by the IRS, TCE provides free tax preparation and advice to middle- and low-income taxpayers ages 60 and older. Call 800-906-9887 or visit http://IRS.treasury.gov/freetaxprep to locate services near you.
You can also get tax preparation help through the AARP Foundation’s Tax Assistance Service. Call 888-227-7669 or visit http://AARP.org/findtaxhelp for more information.
Send your senior questions to: Savvy Senior, PO Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is an NBC Today contributor and author of “The Savvy Senior.”