YOU'RE NEVER TO OLD TO PAY TAXES!

Several years ago when I was doing payroll for the Art Center in Summit one of the teachers came to me to complain about her paycheck.

“I’m 72 years old. You shouldn’t be taking Social Security out of my pay!”

On another front, a retired individual, who eventually became our client, stopped filing tax returns once he turned age 65, even though his annual taxable income was above the filing threshold.

Both were wrong.

You pay “FICA” (Social Security and Medicare) tax, and self-employment tax, from the day you are born until the day you die as long as you have “earned income” (i.e. wages or net earnings from self-employment).

After you turn age 65 (before Clinton it was age 72) you can earn as much as you want without having to pay back some of your Social Security benefits (there is an earned income limita-tion in the year that you turn 65), but even at age 100 Social Security and Medicare tax must be withheld from your wages.

Also, you must pay income tax from the day you are born until the day you die as long as your net taxable income is more than the appropriate filing threshold. And you must file a federal tax return as long as your gross income (all income that is not exempt from tax) exceeds your filing threshold (your standard deduction, including any addition for age or blindness, plus your personal exemption and, if married filing joint, that of your spouse).

The individual who stopped filing returns at age 65 became our client when the IRS reconstructed all his unfiled returns, using the standard deduction, and put a lien on his home!

TTFN