Filing Your Taxes in Retirement: What Changes and What You Still Need to Do

What filing taxes in retirement actually means

Filing taxes in retirement works almost the same way it did when you were working — you still report income, still claim deductions, and still send forms to the IRS by April 15. The main difference is that your income sources change. Instead of a W-2 from an employer, you may have Social Security, pension payments, investment income, or withdrawals from retirement accounts. Some of these are taxed differently than wages, and some have special rules about when you have to file at all.

You do not automatically stop filing just because you retired. The IRS has income thresholds — the amount you can earn before you must file — and those thresholds are higher for people over 65. But if you have any income above that threshold, or if you had taxes withheld from your payments, you should file to get money back.

Key Takeaways

• The income threshold for filing is higher if you are 65 or older, and it depends on whether you are single, married, or a widow or widower.
• Social Security income counts toward your filing threshold, but only half of it counts as taxable income for this purpose.
• You can claim the standard deduction (higher at 65+) or itemize deductions, and most retirees benefit from the standard deduction.
• If you took distributions from a traditional IRA or 401(k), you must report the full amount as income, even if you did not receive a 1099-R form.
• You can file on paper with Form 1040 or use tax software, and the IRS offers free filing options if your income is below a certain level.

Do you have to file at all? The income thresholds for 65 and older

Whether you must file depends on your total income and your filing status. If you are single and 65 or older, you do not have to file unless your gross income was $15,000 or more in 2024 (this number changes each year). If you are married and both spouses are 65 or older, the threshold is $30,000. If one spouse is under 65, it is $29,200. If you are a widow or widower and 65 or older, the threshold is $19,400.

These thresholds apply to your total income from all sources: wages, self-employment, Social Security, pensions, interest, dividends, and distributions from retirement accounts. Social Security is counted at half its value for this purpose — so if you received $20,000 in Social Security, only $10,000 counts toward the threshold.

Even if your income is below the threshold, you should file if you had income tax withheld from any of your payments. Filing lets you claim that money back as a refund. You should also file if you are owed a tax credit, like the Earned Income Tax Credit or the Saver's Credit.

Gathering the documents you will need

Before you start, collect all the forms that show your income. These include Social Security statements (you get one each January), 1099-R forms from IRAs or pensions (showing distributions), 1099-INT forms from banks (showing interest), 1099-DIV forms from investments (showing dividends), and any 1099-NEC or 1099-MISC forms if you had self-employment or other income. If you worked part of the year, you will also have a W-2.

You will also need records of any deductible expenses if you plan to itemize — mortgage interest statements (Form 1098), property tax records, charitable donations, and medical expenses. Most retirees use the standard deduction instead, so you may not need these unless your deductions are unusually large.

Keep your Social Security number, your spouse's Social Security number (if filing jointly), and your bank account information for direct deposit of any refund. If you are filing on paper, you will also need your mailing address and phone number.

Reporting Social Security income correctly

Social Security is partially taxable, but only if your combined income exceeds certain thresholds. Your "combined income" is calculated as your adjusted gross income plus nontaxable interest plus half your Social Security benefits. If you are single and your combined income is between $25,000 and $34,000, you may have to pay tax on up to 50 percent of your benefits. If it is over $34,000, you may have to pay tax on up to 85 percent.

If you are married filing jointly, the thresholds are $32,000 and $44,000. If you are married filing separately, the rules are much stricter and you should consult a tax professional.

You report Social Security on Form SSA-1099, which you receive in January. You then transfer this information to your tax return. The IRS has a worksheet in the Form 1040 instructions that walks you through the calculation. If you use tax software, it usually does this calculation for you automatically.

Handling retirement account distributions and required minimum distributions

If you are 73 or older, you must take a required minimum distribution (RMD) from your traditional IRA or 401(k) each year. The amount is calculated based on your age and account balance, and the IRS publishes a table each year. If you do not take the full RMD, you owe a penalty of 25 percent of the amount you should have withdrawn (this was reduced from 50 percent in recent years, but it is still steep).

You report the full amount of any distribution on your tax return, even if part of it came from money you already paid taxes on. If you made after-tax contributions to your IRA, you may be able to exclude part of the distribution, but this requires Form 8606 and careful record-keeping. If you are unsure whether part of your distribution is nontaxable, ask your IRA custodian or a tax professional.

If you are still working and your employer offers a 401(k), you may be able to delay RMDs from that plan until you actually retire, even if you are over 73. This is called the "still-working exception" and it does not apply to IRAs. Check with your plan administrator about whether your plan allows this.

Choosing between the standard deduction and itemizing

The standard deduction for 2024 is $14,600 if you are single and 65 or older, or $29,200 if you are married filing jointly and both spouses are 65 or older. If only one spouse is 65 or older, it is $28,900. These amounts increase slightly each year.

Most retirees benefit from taking the standard deduction because it is simpler and because their deductible expenses (mortgage interest, property taxes, charitable donations, medical expenses) do not add up to more than the standard deduction. You can claim the standard deduction and charitable donations at the same time only if you use a special rule called the may have access to charitable distribution, which allows you to donate directly from your IRA to a charity without counting it as income.

If you own a home with a mortgage, pay significant property taxes, or make large charitable donations, you might benefit from itemizing. You would list these deductions on Schedule A instead of taking the standard deduction. Use a worksheet or tax software to calculate which option gives you a larger deduction.

Filing your return: paper, software, or professional help

You can file on paper using Form 1040 and any schedules you need, mail it to the IRS, and wait for a response. This is slow — processing takes several weeks — but it works if you prefer not to use a computer.

Tax software like TurboTax, H&R Block, or TaxAct walks you through questions about your income and deductions, calculates your tax, and files electronically. Electronic filing is faster than paper and you get a confirmation within 24 hours. The IRS offers free software through the Free File program if your income is below a certain threshold (usually around $79,000, but this changes yearly).

If your situation is complicated — you have multiple retirement accounts, rental property income, or significant investment gains — you may want to work with a tax professional. A CPA or enrolled agent can file for you and may find deductions or strategies you missed. This costs money, but it can save you more in taxes or penalties than you pay for the service.

Whichever method you choose, file by April 15 or request an extension by that date. An extension gives you until October 15 to file, but it does not extend the deadline for paying any taxes you owe.

What to do if you owe taxes or are owed a refund

If you owe taxes, you can pay online through the IRS website, by mail, or by phone. The IRS accepts credit cards, debit cards, and bank transfers. If you cannot pay the full amount, you can set up a payment plan. Short-term plans (120 days or less) are free, but longer plans charge a setup fee and interest.

If you are owed a refund, the IRS will send it to you by direct deposit (fastest, usually two to three weeks) or by check (slower, usually three to four weeks). You can check the status of your refund on the IRS website using the "Where's My Refund?" tool, which updates once a day.

Keep a copy of your filed return and all supporting documents for at least three years. The IRS can audit returns from the past three years, and you will need these documents to prove what you reported.

Frequently Asked Questions

Do I have to file if I only get Social Security?

Only if your combined income (half your Social Security plus any other income) exceeds the threshold for your filing status. If Social Security is your only income, you probably do not have to file unless it was over $15,000 (if you are single and 65+). But if you had taxes withheld, file to get a refund.

What if I did not get a 1099-R for my IRA withdrawal?

You still have to report it. The IRA custodian is supposed to send you a 1099-R by January 31, but if it does not arrive, contact the custodian and ask for a copy. If you cannot get one, report the distribution based on your own records and keep documentation of what you withdrew.

Can I file taxes before I get all my forms?

You can file once you have the forms for most of your income, but you may have to file an amended return later if you receive additional forms. It is usually better to wait until you have everything, since amended returns take longer to process and can trigger an audit.

What if I am still working part-time in retirement?

Report your W-2 wages along with your other income. Your total income (wages plus Social Security plus any other income) determines whether you have to file and how much of your Social Security is taxable. You may also owe self-employment tax if you are self-employed.

Do I need to file if my spouse is still working and we file jointly?

Your filing requirement is based on your combined income. If your spouse's income alone exceeds the threshold for married filing jointly ($30,000 for 2024 if both are 65+), you must file. Even if it does not, you should file if either of you had taxes withheld or if you are owed a credit.