Publication 554 - Introductory Material


What's New

Alternative minimum tax exemption increased. The AMT exemption amount has increased to $52,800 ($82,100 if married filing jointly or qualifying widow(er); $41,050 if married filing separately).

Earned income credit. The maximum amount of income you can earn and still get the credit has increased. You may be able to take the credit if you earn less than:

  • $14,590 ($20,020 if married filing jointly), do not have a qualifying child, and are at least 25 years old and under 65,

  • $38,511 ($43,941 if married filing jointly), and you have one qualifying child,

  • $43,756 ($49,186 if married filing jointly), and you have two qualifying children, or

  • $46,997 ($52,427 if married filing jointly), and you have three or more qualifying children.

For more information, see Earned Income Credit , later.

Exemption phaseout. You lose at least part of the benefit of your exemptions if your adjusted gross income is above a certain amount. For 2014, the phaseout begins at $152,525 for married individuals filing separate returns; $254,200 for single individuals; $279,650 for heads of household; and $305,050 for married individuals filing joint returns or qualifying widow(er)s. For more information, see Phaseout of Exemptions in Publication 501.

Limit on itemized deductions.  Itemized deductions may be reduced for taxpayers with an adjusted gross income above $152,525. See Overall limitation , later.

Reminders

Future developments. For the latest information about developments related to Publication 554, such as legislation enacted after it was published, go to www.irs.gov/pub554.

Tax return preparers. Choose your preparer carefully. If you pay someone to prepare your return, the preparer is required, under the law, to sign the return and fill in the other blanks in the Paid Preparer's area of your return. Remember, however, that you are still responsible for the accuracy of every item entered on your return. If there is any underpayment, you are responsible for paying it, plus any interest and penalty that may be due.

Sale of home by surviving spouse. If you are an unmarried widow or widower, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. For more information, see Sale of Home , later.

Third party designee. You can check the “Yes” box in the Third Party Designee area of your return to authorize the IRS to discuss your return with your preparer, a friend, family member, or any other person you choose. This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your return. It also allows your designee to perform certain actions. See your income tax return instructions for details.

Employment tax withholding. Your wages are subject to withholding for income tax, social security tax, and Medicare tax even if you are receiving social security benefits.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Introduction

The purpose of this publication is to provide a general overview of selected topics that are of interest to older taxpayers. The publication will help you determine if you need to file a return and, if so, what items to report on your return. Each topic is discussed only briefly, so you will find references to other free IRS publications that provide more detail on these topics if you need it.

Table I has a list of questions you may have about filing your federal tax return. To the right of each question is the location of the answer in this publication. Also, at the back of this publication there is an index to help you search for the topic you need.

While most federal income tax laws apply equally to all taxpayers, regardless of age, there are some provisions that give special treatment to older taxpayers. The following are some examples.

  • Higher gross income threshold for filing. You must be age 65 or older at the end of the year to get this benefit. You are considered age 65 on the day before your 65th birthday. Therefore, you are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year.

  • Higher standard deduction. If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. You are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year.

  • Credit for the elderly or the disabled. If you qualify, you may benefit from the credit for the elderly or the disabled. To determine if you qualify and how to figure this credit, see Credit for the Elderly or the Disabled , later.

  • Lower threshold for deducting medical and dental expenses. If you or your spouse are 65 or older, you can deduct the part of your medical and dental expenses that exceed 7.5% of your adjusted gross income.

Return preparation assistance.   The IRS wants to make it easier for you to file your federal tax return. You may find it helpful to visit a Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), or American Association of Retired Persons (AARP) Tax-Aide site near you.

Volunteer Income Tax Assistance and Tax Counseling for the Elderly.   These programs provide free help for low-income taxpayers and taxpayers age 60 or older to fill in and file their returns. For the VITA/TCE site nearest you, contact your local IRS office. For more information, see Preparing and filing your tax return under How To Get Tax Help.

  For the location of an AARP Tax-Aide site in your community, call 1-888-227-7669. When asked, be ready to press in or speak your 5-digit ZIP code. Or you can visit their website on the Internet at www.aarp.org/money/taxaide.

Comments and suggestions.    We welcome your comments about this publication and your suggestions for future editions.

  You can send us comments from www.irs.gov/formspubs. Click on “More Information” and then on “Give us feedback.

  Or you can write to:

Internal Revenue Service 
Tax Forms and Publications 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224

  We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

  Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.

Ordering forms and publications.    Visit www.irs.gov/formspubs to download forms and publications. Otherwise, you can go to www.irs.gov/orderforms to order forms or call 1-800-829-3676 to order current and prior-year forms and instructions. Your order should arrive within 10 business days.

Tax questions.    If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to the above address.

Table I.What You Should Know About Federal Taxes

Note. The following is a list of questions you may have about filling out your federal income tax return.  
To the right of each question is the location of the answer in this publication.

What I Should Know Where To Find the Answer
Do I need to file a return? See chapter 1.
Is my income taxable or nontaxable? 
 
If it is nontaxable, must I still report it?
See chapter 2.
How do I report benefits I received from the Social Security Administration or the Railroad Retirement Board? 
 
Are these benefits taxable?
See Social Security and Equivalent Railroad Retirement Benefits in chapter 2.
Must I report the sale of my home? 
 
If I had a gain, is any part of it taxable?
See Sale of Home in chapter 2.
What are some of the items that I can deduct to reduce my income? See chapters 3 and 4.
How do I report the amounts I set aside for my IRA? See Individual Retirement Arrangement Contributions and Deductions in chapter 3.
Would it be better for me to claim the standard deduction or itemize my deductions? See chapter 4.
What are some of the credits I can claim to reduce my tax? See chapter 5 for discussions on the credit for the elderly or the disabled, the child and dependent care credit, and the earned income credit.
Must I make estimated tax payments? See chapter 6.
How do I contact the IRS or get more information? See chapter 7.


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