Taxes in Retirement: Document Checklist, Forms, and Tax Breaks 

Entering retirement brings many life changes, including your taxes. How significant these changes are depends on your income and whether it affects your tax rate and liability. Regardless, you will likely file some new tax forms and quit filing others. Whether you’re planning for retirement or already enjoying the fruits of your labor, this guide will show you tax breaks to consider and some must-have information you need on hand when filing taxes in retirement. 

Tax document checklist for retirees

Before you file, make sure to grab all the documents you’re used to having each year. Don’t forget your personal information, income documents, and records of government payments.  

We’ve provided a checklist of all the documents you’ll need to file.  

Personal information 

  • Social Security or tax ID number for everyone on your return To file, you’ll need Social Security numbers (SSNs) for yourself and everyone on your return, including your spouse and dependents. You can use an Individual Taxpayer Identification Number (ITIN) if you don’t have an SSN. 
  • Birthdates for everyone on your return  
  • ID or driver’s license (and your spouse’s ID if married filing jointly) 

Income 

  • W-2 Forms for each employer – If you’ve recently retired or are working part-time. 
  • Unemployment income This income is reported on Form 1099-G. 
  • Social Security benefits – This income is reported on Form SSA-1099. Your Social Security benefits may be taxable depending on your income and filing status.  
  • Payments from pensions, annuities, life insurance policies, 401(k)s, and IRAs Distributions from these accounts are reported on Form 1099-R.  
  • Bank or financial institution statements 
  • Interest-bearing accounts Interest income from investment accounts is reported on Form 1099-INT
  • Dividends (and other distributions) This income is reported on Form 1099-DIV
  • Last year’s refund amount If you itemize deductions, last year’s state refund affects your tax return. 
  • Other 1099s – If you pick up a part-time job throughout the year, you may receive additional forms. 
  • Miscellaneous income records 

Payments already made

Gather records of federal and state/local taxes paid throughout the year (including quarterly estimated payments) if the payments are not shown on your other tax forms. 

Deductions 

One of the main distinctions between filing before and after reaching retirement age is the standard deduction. If you’re over 65, you’ll receive an additional $1,850 if you take the standard deduction. Standard deduction amounts for tax year 2024 are as follows: 

Filing status Standard deduction amount 
Single $14,600 
Married Filing Separately $14,600 
Married Filing Jointly $29,200 
Qualifying Widow(er) $29,200 
Head of Household $21,900 

As always, you can choose to itemize deductions on your tax return. Common documents needed to itemize include:   

Additionally, you can deduct medical expenses that exceed 7.5% of your AGI on your federal return. If you’re self-employed after you retire, e.g., you become a consultant, you can deduct Medicare premiums.

Credits

When you retire, you can often claim similar credits as you did when you worked full-time. But there are credits you should be aware of as you age – the most notable of those is the Credit for the Elderly and Disabled. To qualify for this credit, you must be 65 or older or retired due to permanent and total disability. 

Retirement tax breaks

There are more federal tax provisions meant to give retirees a break come tax time. For example, when you turn 65, the federal filing threshold – or the minimum income you must make before filing a federal tax return – increases. Social Security payments are also tax deductible if you’re still working and earn less than $25,000 (or $32,000 for couples filing jointly) per year.  

Your state may have specific tax provisions designed for retirees – refer to your state’s department of revenue for more information on available tax breaks.  

Common tax forms for seniors

Once you’ve gathered all the income records and tax forms needed to file, it’s time to get down to business! Along with the tax forms you typically receive, you may get a few new ones when you retire. These include: 
 

  • Form SSA-1099 – Social Security benefits 
  • Form 1099-R – Income from your retirement accounts 
  • Form 1099-INT – Interest from investment accounts 
  • Form 1099-DIV – Income from dividends 

How retirement may impact your tax situation

Every life change can impact your tax rate, and retirement is no exception. The transition to retirement looks different for everyone, and the impact on taxes depends on changes in your income. You may start withdrawing from a retirement account – here’s what you need to know. 

When you turn 59 and ½, you can start pulling money from your retirement accounts penalty-free. These withdrawals are tax-free if you have a Roth IRA or 401(k). If you’re still working at age 73, you must begin taking Required Minimum Distributions from retirement accounts sponsored by former employers if you haven’t moved the funds into an IRA.  

HSA accounts are also impacted when you retire. When you turn 65, you can withdraw and use money from an HSA for any reason. The only catch is that you’ll have to pay income taxes on funds not used for medical expenses. 

When you retire, you’ll receive Social Security benefits to help with your living expenses. How much you get each month depends on your retirement age.  

For example, if you retire in 2024 at age 62, you will receive $2,710 each month. This dollar amount will gradually increase yearly until you turn 67 (full retirement age). If you retire at age 70, you will receive 124% of your Social Security benefits, which is $4,873 monthly. 

If you’re giving gifts to loved ones, you give them up to $18,000 worth of monetary gifts per year or $13.61 million worth of monetary gifts in your lifetime without paying taxes. 

FAQs about taxes in retirement

We’re here with answers to common questions about filing taxes when you retire! 

What taxes do I pay at full retirement age? 

When you retire, you’re responsible for paying taxes on Social Security benefits and tax-deferred retirement accounts, like traditional 401(k)s and IRAs. 

How much can a retired person earn without paying taxes? 

Depending on your filing status, you can make up to $32,000 before being taxed on 50% of your Social Security benefits. If you make more than $34,000, you will be taxed on 85% of your Social Security benefits. 

Do I still pay Social Security tax after retirement? 

Yes, if you continue to work after retirement, your earnings will be subject to Social Security taxes. This is the case even if you’re only working a part-time job. 

Is retirement money considered earned income? 

This answer depends on the type of retirement account you have. For example, pension payments are fully taxable unless you make after-tax contributions. Social Security benefits and traditional 401(k) and IRA accounts are taxed at your income tax rate.  

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