Hello,
I'll be 63 this December. I've been unemployed since August 2020 but I consider myself still eligible for work. Since I am ineligible for unemployment insurance compensation, I withdrew funds from a precious metals IRA on which to live in 2021. I withheld 20% to cover Federal taxes, but the IRA custodian would not withhold State taxes (I live in Michigan).
My three questions:
1) If I do not get a job in 2021, will I still need to file an income tax return?
2) If yes to the above, is 20% sufficient to cover Federal withholding?
3) Instead of looking for work which has not been successful to date, should I just retire?
Thank you!
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@fcizmar001 wrote:
My three questions:
1) If I do not get a job in 2021, will I still need to file an income tax return?
2) If yes to the above, is 20% sufficient to cover Federal withholding?
3) Instead of looking for work which has not been successful to date, should I just retire?
#1) That depends on your total income fore the year.
If you are a U.S. citizen or resident, whether you must file a return depends on three factors.
Your gross income.
Your filing status.
Your age.
See IRS Pub 17
IF your filing status is... | AND at the end of 2020 you were...* |
THEN file a return if your gross income was at least...** |
|
Single | under 65 | $12,400 | |
65 or older | $14,050 | ||
Married filing jointly*** | under 65 (both spouses) | $24,800 | |
65 or older (one spouse) | $26,100 | ||
65 or older (both spouses) | $27,400 | ||
Married filing separately | any age | $5 | |
Head of household | under 65 | $18,650 | |
65 or older | $20,300 | ||
Qualifying widow(er) | under 65 | $24,800 | |
65 or older | $26,100 |
#2) Again, that depends on your total taxable income and the tax bracket you will fall into if you must file.
#1 & 2 for state both requirements may be different.
#3 - That is a personal decision.
"should I just retire?"
Eighteen months ago it would have been impossible for you to get hired.
Now, the whole job market picture has changed, since people are changing careers or just not going back to work.
Employers cannot fill their open positions.
If you want to work, you should be able to find an employer.
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