Submitted By: Janice
Answered: July 8, 2014 8:30 am

Are wages earned by someone who is age 65 or older tax free?

Earned income remains taxable regardless of age. Similarly, such income continues to be subject to Social Security and Medicare taxes (FICA for an employee; self-employment tax for a self-employed person). The one age-related break: once a worker reaches the full retirement age (currently 66), then he/she can have any amount of earned income without a reduction or complete loss of Social Security benefits.

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Tax Glossary

Capital gain distribution

A mutual-fund distribution allocated to gains realized on the sale of fund portfolio assets. You report the distribution as long-term capital gain even if you held the fund shares short term.

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