Am I Required to Pay Taxes?

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This article is up to date for tax year 2020 (returns filed in 2021).

Taxes are a part of life. There are no loopholes that you can use to get out of them. If you meet certain standards, you will be required to pay taxes.  

Does the IRS know if I don’t pay my taxes?

Yes, the IRS will know if you owe income tax but you don’t file a return.

Do not try to avoid filing or paying, because your employer, retirement account, health insurance company, and others have already reported your information to the IRS when they mailed it to you. They typically send two copies: one to you and one to the IRS. Your return must match the records the IRS currently has. That’s why it is so important — not only to file — but to enter all your information accurately. 

How do I know if I have to file?

If you earned more than the following amounts in 2020, you are required to file a tax return. 

Filing Status  Under 65  65 and older 
Single  $12,400  $14,050 
Married Filing Jointly  Both under 65: $24,800 

One under 65: $26,100 

Married Filing Separately  $5  $5 
Head of Household  $18,650  $20,300 
Qualifying Widow(er)  $24,800  $26,100 

Can I get out of paying my taxes?

Sometimes your tax bill can be significant if you do not withhold the right amount or pay quarterly estimated taxes. It is tempting to try to avoid paying your bill, and some people come up with arguments to try to get out of it. 

While you may think that you won’t be caught, you could end up paying $5,000 or more in fines. So as tempting as the following arguments may be, the IRS will find out if you are avoiding paying your taxes. Here are four common arguments and why they won’t work against the IRS.

Wages, tips and other compensation are not income — FALSE

You must claim all earned income on your tax return, including wages reported on Form W-2, all tip income, and side hustle income reported on Form 1099. The IRS considers all of this income, and usually already has a record from your employer or the person who you contract for.

The taxpayer is not a citizen of the United States and so is not subject to federal income tax laws — THIS IS FALSE

If you are a citizen and earn income inside or outside of the United States, you must report it. If you live in the U.S. and earn income but are not a citizen, you are also responsible for paying taxes. All income made inside of the United States is taxable. Similarly, all income made by U.S. citizens, even if outside of the country, is also taxable. However, there are tax credits available, so you don’t end up owing tax twice on the same income.

The taxpayer is not a “person” and therefore not subject to federal income tax laws — THIS IS FALSE

Since the IRS code defines a “person” as an “individual, trust, estate, partnership or corporation,” nearly every entity is responsible for filing a tax return. This includes individuals and businesses.

Filing a tax return and paying taxes is completely voluntary — THIS IS FALSE

This is not true. If you make a certain amount of income, you are required to pay taxes as shown in the table above. Also, if you are due a refund, you must file your tax return to receive it. 

If you really want to save money on your taxes, the best thing to do is to learn about the real credits and deductions that are out there, and stay aware and informed of the changes in the tax code.

TaxSlayer is here to help you file fast, accurately, and get every tax break you deserve. Start filing with TaxSlayer for free.

This article is intended to provide general information to the public and does not provide personalized tax, investment, legal, or business advice. You should seek the assistance of a professional for advice on taxes, investments, and any other financial, legal, or business matter pertinent to your individual situation.

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