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.
A fixed deduction allowed to every taxpayer, except those who may be claimed as a dependent by another person. Extra exemption deductions are allowed for a spouse on a joint return and for each qualifying dependent. A deduction of $3,400 is allowed for each exemption claimed on 2007 returns, but the deduction is phased out for certain high income individuals.