Some taxpayers may feel that once they stop earning a regular wage that won't need to file an income tax return. However, there are some tax situations that face older individuals that may still require them to file a federal tax return. The key is understanding the tax filing requirements for retirees so that you can make sure you comply with the tax law.

Tax Situations That Face Retirees

Retirees who don't earn a wage any longer may not have to file a tax return if their only income comes from Social Security. However, if you're retired from your previous career and working part time in another field, you may still have to file a return if you earn more than your filing threshold. Similarly, if you're earning income as a result of a hobby or from a self-employment venture, you'll likely have to file a tax return.

Many retired individuals draw a regular retirement distribution from their previous employers. If the distributions come from a tax-deferred plan such as a 401(k) or a traditional IRA, then retirees will owe income tax on these payments. On the other hand, if a retiree is receiving distributions from a Roth IRA, then these payments are generally tax-free.

How to Figure Tax Liability for Retirees

If you're a retired individual and you determine that you have to pay income tax, how do you know how much tax to pay? As a general rule, you'll have to pay in according to your tax bracket for your earned income. As an example, if you're retired and you earn $10,000 in a tax year, you'll pay the tax on that according to your age and filing status.

What about Social Security benefits? These are usually tax-free but if you're receiving income from other sources, you may have to pay tax on them. The IRS issues a guideline for how much income you can earn each year before you have to pay tax on your Social Security benefits. The amounts vary, depending on your filing status. As an example, in 2011, the limit was $25,000 for single filers. This meant that if the total of your earnings and Social Security benefits exceeded $25,000, then you'd have to pay tax on a portion of your benefits.

To answer our question above, yes, some retirees do have to file income tax returns. For help determining if this situation applies to you, talk with an experienced tax adviser who can help you analyze your own financial standing.