IRS Filing Requirements for Retired Persons

IRS Filing Requirements for Retired Persons
After you retire, you may still need to file income tax returns.

General Requirements

All U.S. citizens, regardless of age, are required to file an income tax return if their income meets or exceeds the threshold set by the IRS. For the 2012 tax year, taxpayers 65 years of age and older were required to file a tax return if their income was at least $11,200 for a single person, $13,950 for a head of household and $21,800 for married taxpayers filing a joint return.

Social Security Income

For many retirees, Social Security benefits are not taxable, but those benefits must still be reported to the IRS. Each year, the Social Security Administration sends each recipient a 1099 form that details the total amount of Social Security benefits paid, including deductions for Medicare coverage. While tax laws change occasionally, the 2012 rule of thumb for determining tax status was to add half of your Social Security income to all your other income. If this number is greater than $32,000 and you're married and filing a joint return, your Social Security benefits may be taxable. Single taxpayers' benefits may be taxable if that total is more than $25,000.

Retirement Plan Distributions

Many retirees receive income from an IRA or 401(k) plan. The administrator of the IRA, 401(k) or pension plan is required to send participants a Form 1099-R indicating the amount withdrawn. In most cases, participants in IRAs and 401(k) plans are required to start taking minimum required distributions by age 70 1/2, and those distributions are taxed as ordinary income.

Interest, Dividends and Capital Gains

Many retired people receive income from investments, including interest payments, dividends and profit on the sale of stocks or bonds. All these sources of income must be reported to the IRS, but the tax treatment varies. While the tax laws change from year to year, in 2012, qualified dividends and long-term capital gains (gains on securities held for over a year) were taxed at a maximum rate of 15 percent, while interest and ordinary dividends are taxed at the individual's regular income tax rate.