Retirement Planning:

Special Rules for Senior Citizens

Following is a list of special rules that apply to senior citizens only:

  • If your client is 65 or older as of January 1, 2000, they are eligible to receive a higher standard deduction on their tax return, assuming that they choose to take the standard deduction instead of itemizing their deductions. Single senior citizens can claim an additional $1,050 on their 1999 tax return. Those that are married or qualified widow(ers) can claim an additional $850.
  • If they are single as well as age 65 or older as of January 1, 2000, they are only required to file a tax return if their gross income exceeds $8,100. If they are married and both them and their spouse are age 65 or older, a joint return is only required to be filed if their combined gross income exceeds $14,400. If only one of them is over the age of 65, their combined gross income must be $13,550 or more in order for them to be required to file a tax return.
  • For married couples filing jointly, none of their net Social Security benefits are taxable in 1999 as long as their income is not more than $32,000. If their filing status is single, head of household, qualifying widow(er) or they are married filing separately and did not live with their spouse at anytime during 1999, thier Social Security benefits are not taxable as long as they did not make more than $25,000 in gross income. Married persons who live together but file separately are not allowed a base amount of gross income from which to determine if they are eligible to have their Social Security benefits deemed as nontaxable.
  • A tax credit may be available to them if they are 65 years of age or older and receive little or no Social Security or Railroad Retirement benefits. This credit may be available to those under the age of 65, but only if they are totally disabled. If your client does receive Social Security benefits, they may only be eligible for the credit if they are single and receive less than $417 each month from Social Security. If they are married and file jointly, they cannot use the credit if they receive more than $625 each month combined from Social Security.