Senior Citizens & Taxes

Sometimes people say – “Senior Citizens should not have to pay taxes.” Did you know…?

The standard deduction for federal taxes for 2024 is $14,600 for single or $29,200 for married filing joint. If 65 or older – Senior Citizen Age – it is 16,150 single or $32,200 married. You pay no taxes on these amounts of income, at all in 2024. These amounts go up every year for inflation.

In addition to that, for federal income tax purposes, Social Security benefits are not part of your taxable income calculation until half of your Social Security benefits plus your other income are more than $25,000 single or $32,000 married.

In 2024 the maximum Social Security benefit you could receive is $58,476. On a married return if both spouses got $58,476 therefore you would have $116,952, and no other income you would pay federal tax of $0.

If you and your spouse received a total of $69,920 in Social Security benefits you could have other income of $17,500 and pay federal tax of $0. (Total income of $87,420). If you and your spouse received a total of $45,000 in Social Security benefits and $22,900 in other income you would pay $0 federal tax. (Total income of $67,900). This is a common amount I see in Social Security benefits.

The amounts for single seniors to pay $0 federal tax would be:

1. $58,476 with no other income
2. $40,000 Social Security benefits and $12,000 other income. ($52,000)
3. $30,000 Social Security benefits and $13,750 other income. ($43,750).
   • As you can see from the above – it all depends on your other income. What
     might that other income be?
4. IRA distributions or pension payments. Wherever you worked you
   agreed in the past to set money aside and not pay taxes then, for the
   chance for it to grow into funds for your retirement. You agreed to pay taxes
   at the time you took the money out.
5. Interest, Dividends, and Capital Gains – that means you have money set
   aside and it is working for you.
6. Maybe you still work and that is where the other income comes from.
   • All of these are taxable because of either a decision you made in the past –
     IRA and pension – or a decision you made now – invest your money or
     keep working. These are not taxable because of your age they are taxable
     because of your choices.

For Ohio Taxes:

1. Ohio does not tax Social Security benefits.
2. Ohio does not tax Disability benefits.
3. Ohio does not tax Active Duty Military wages while stationed out of Ohio.
4. Ohio does not tax Retired Military benefits associated with uniformed
   service.
5. Ohio does not tax the first $25,000 of all other income received as an
   Ohio resident.

For City Taxes:

• Ohio cities that have an income tax collect taxes on wages and earned income as well as on rental properties within their city limits. Ohio cities DO NOT tax retirement benefits or Social Security benefits.