Fewer Households (43%) Pay No Federal Income Taxes

Fewer Households (43%) Pay No Federal Income TaxesAbout 43 percent of U.S. households — that’s 70 million homes – will likely not pay any federal income tax for 2013 because they do not owe any.
That’s a decrease from recent years, thanks to the improving economy and the expiration of many post-financial crisis tax cuts, according to the nonpartisan Tax Policy Center, which published its latest report on federal income taxes on Thursday.
The majority of households with zero federal income tax owed this year — nearly 67 percent — have incomes below $30,000.
Most who don’t pay any income tax earn too little. Most of the others benefit from exclusions, deductions, exemptions, and credits that “zero out” their tax liability, said Roberton Williams of the Tax Policy Center.
However, of the households that pay no income tax, about two-thirds do pay payroll taxes.
Who pays neither income nor payroll taxes. About two-thirds are elderly residents.
“Most of the rest are non-elderly with incomes under $20,000,” says the Tax Policy Center in its pie chart. “Less than a tenth are non-elderly with income over $20,000.”

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