Do you have a lot of medical bills that you pay on each month? Could those medical bills be deducted from your tax bill this year? I was helping my mother take care of all of her finances after my dad passed away. I didn't realize how many bills she had coming in each month for medical treatments that my dad had undergone months, even a year earlier. I started doing some research about medical bills and tax deductions. If you have medical bills, take a minute to read through this blog to gain some knowledge that can help you decide what you can do when tax time comes around.
Retiring brings with it newfound freedom from many things people are used to from a lifetime of working. For many retirees, this includes freedom from filing taxes each spring. But, how can you know if and when you can stop filing taxes? And are there reasons to continue to do so nonetheless? Here are the answers to 3 burning questions about filing as a retiree.
Are You Required to File Taxes?
Generally, if Social Security benefits are your only source of income during any given year, you don't have to file with the IRS. If you receive some other income, such as W-2 wages, Forms 1099 or taxable investments, you can complete a basic checklist in Publication 915 to determine if your earned income meets the threshold for filing. This formula involves adding all your earned income and half your Social Security income together and determining if it meets the minimum threshold for filing. In 2015, this minimum was $34,000 for single filers and $44,000 for married filing jointly.
If you aren't receiving Social Security benefits, you are subject to the same filing thresholds as everyone else. For 2015, these were $10,300 for most single filers and $11,850 for those over 65.
Is there a Procedure for Stopping?
There's not really anything special you need to do in order to stop -- no need to notify the IRS or fill out any forms. The IRS does receive notification of any income you earn, so their computers can do the math and see that your income falls below the filing threshold. For proof that you can legitimately choose to not file, you should keep any tax documents you received in a file along with copies of prior year tax returns.
Should You Still File?
Even if you're not obligated to file taxes for the above reasons, you can still choose to do so in a few special circumstances. These include:
Now that you have the scoop on when and how you can cease to file taxes, you can approach filing season with confidence. It's one less thing to worry about as you begin your new chapter in life. If you need more help, contact professionals like HBE Becker Meyer Love LLP.Share