Leona's Tax Return Requirement
Understanding Leona's Tax Situation
Adjusted Gross Income (AGI): AGI is an individual's total income minus specific deductions such as educator expenses, student loan interest, and contributions to retirement accounts. It is important to determine the AGI to assess tax liability.
Standard Deduction for Taxpayers Over 65 Years Old
For taxpayers who are 65 years or older, the standard deduction is higher. In the case of Leona, being 68 years old, she qualifies for an additional standard deduction on top of the basic deduction available to all taxpayers.
Calculation for Leona's Tax Return Requirement
To calculate the maximum AGI that Leona can have without needing to file a tax return, we consider the standard deduction components. For the year 2020, the standard deduction for a single filer is $12,400. An additional standard deduction of $1,650 is applicable for individuals aged 65 or older.
Therefore, for Leona, her total standard deduction will be $12,400 + $1,650 = $14,050. This means that Leona can have an adjusted gross income of up to $14,050 in 2020 without being required to file a tax return.
It is essential for taxpayers to understand the tax rules applicable to their age group and filing status to ensure compliance with the IRS regulations.