What Income Levels Are Not Required to Pay Federal Income Tax?

by Gregory Hamel

The federal government taxes income to collect some of the money it needs to continue operating, but not everyone pays federal income tax. The Internal Revenue Service lets taxpayers reduce taxes by claiming tax deductions and credits. If your annual income does not exceed certain levels, you don't have to pay income tax.

Income Tax Basics

When you file your tax return, you can reduce your taxable income by a standard deduction and a personal exemption. The personal exemption is $3,900 for the 2013 tax year. The standard deduction is $6,100 for single taxpayers, $8,950 for heads of households, and $12,200 for married people filing joint returns. If you make less than the sum of your standard deduction and personal exemption, you have no taxable income. So you pay no federal income tax for 2013 if you make $10,000 or less as a single filer, $12,850 or less as a head of household or $20,000 or less as a joint filer.

Aged and Blind Taxpayers

People who are blind or at least 65 are granted larger standard deductions. According to the IRS, the aged and blind get an additional standard deduction amount of $1,200, or $1,500 if the taxpayer is unmarried and not a surviving spouse in 2013. This means aged or blind taxpayers do not owe income tax unless their income exceeds $11,500 for single filers, or $14,350 for heads of household. The threshold is $21,200 for joint filers if one spouse is aged or blind, and $22,400 for joint filers if both are aged or blind.

Rules for Dependents

A dependent is someone who depends on a taxpayer for financial support. A dependent might be a child, an elderly parent, or an adult with low income. If you have a dependent, you can claim an additional exemption on your income tax return. The amount you can make before owing income tax increases by $3,900 for each dependent exemption.

Considerations

You could end up paying no federal income tax even if your annual income is substantially higher than your standard deduction, personal exemptions and dependent exemptions. There's a wide variety of tax deductions and credits for things such as property taxes, home mortgage interest, charitable gifts and child-care expenses. If you qualify for additional breaks, it could reduce your tax liability to zero.

About the Author

Gregory Hamel has been a writer since September 2008 and has also authored three novels. He has a Bachelor of Arts in economics from St. Olaf College. Hamel maintains a blog focused on massive open online courses and computer programming.

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