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posted Jun 4, 2019 9:34:28 PM

Should someone who earned less than $25,000 pay over a $1,000 in taxes, despite the standard deduction?

A gross salary under $ 25,000 is supposed to be under the poverty guidelines, why should someone earning less than pay more than $1,000 in taxes? 

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Expert Alumni
Jun 4, 2019 9:34:29 PM

$25,000 is not a meaningful number for federal income tax liability. If one is single, the standard deduction and exemption write-off just $10,350. Taxes kick in after that, and before that if one didn't have FICA taxes withheld or is being claimed as a dependent.

So, if one had a "simple" return with exactly $25,000 in wages, there would be taxable income of $14,560.

The tax on that would be in the vicinity of $900.

Your tax return may also include self-employment taxes, penalties and other taxes in addition to regular income tax.

A gross salary of $25,000 is not exempt from tax, as it is not below $10,350.