What are the Income Tax Filing Requirements?

What are the IRS income tax filing requirements for tax year 2020 for retirees? My income dropped substantially when I was forced into retirement last March due to COVID, so I am wondering if I need to file a tax return this year.

Whether you are required to file a federal income tax return for the 2020 tax year depends on many factors, including how much you earned in 2020, the source of that income, your age and your filing status.

Here is a quick rundown of this tax season's IRS tax filing requirement thresholds. If your 2020 gross income was below the threshold for your filing status and age, you may not have to file. Generally, gross income includes all taxable income, except your Social Security benefits.
  • Single: $12,400 ($14,050 if you are 65 or older by Jan. 1, 2021).
  • Married filing jointly: $24,800 ($26,100 if you or your spouse is 65 or older; or $27,400 if you are both over 65).
  • Married filing separately: $5, regardless of age.
  • Head of household: $18,650 ($20,300 if age 65 or older).
  • Qualifying widow(er) with dependent child: $24,800 ($26,100 if age 65 or older).
To get a detailed breakdown on federal filing requirements, along with information on taxable and nontaxable income, call the IRS at 800-829-3676 and ask them to mail you a free copy of the "1040 and 1040-SR Instructions for Tax Year 2020." You can also get it online at IRS.gov.

Other Filing Factors


There are, however, some other financial situations that may require you to file a tax return, even if your gross income falls below the IRS filing requirements. For example, you would need to file if you earned more than $400 from self-employment in 2020, owe any special taxes like the alternative minimum tax or get premium tax credits because you, your spouse or a dependent is enrolled in a Health Insurance Marketplace plan.

You will also need to file if you are receiving Social Security benefits, and one-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 figure all this out, the IRS offers an interactive tax assistant tool on their website that asks a series of questions to help you determine if you are required to file, or if you should file because you are due a refund. It takes less than 15 minutes to complete.

You can access this tool at IRS.gov/Help/ITA. Click on "Do I Need to File a Tax Return?" You can receive assistance over the phone by calling the IRS helpline at 800-829-1040.

Check Your State


Even if you are not required to file a federal tax return this year, do not assume that you are also excused from filing state income taxes. The rules for your state might be very different. Check with your state tax agency before concluding that you do not need to file. For links to state tax agencies, see Taxadmin.org/state-tax-agencies.

Tax Preparation Assistance


If you find that you need to file a tax return this year, you can file for free through the IRS at IRS.gov/FreeFile if your 2020 adjusted gross income was below $72,000.

If you need additional help, contact the Tax Counseling for the Elderly (TCE) program. Sponsored by the IRS, TCE provides free tax preparation and counseling to middle and low-income taxpayers, age 60 and older. Call 800-906-9887 or visit IRS.treasury.gov/freetaxprep to find out about services near you.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

 

Published February 5, 2021

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