Certain groups of people who meet specific criteria don't have to pay income taxes. For example, for the 2022 tax year (2023), if you're single, under the age of 65, and your yearly income is less than $12,950, you're exempt from paying taxes. Ditto if you're married and filing jointly, with both spouses under 65, and income less than $25,900. Heads of households earning less than $19,400 (if under 65) and less than $21,150 (if 65 or older) are also exempt. If you're over the age of 65, single and have a gross income of $14,700 or less, you don't have to pay taxes. Or if you're married and filing jointly, and you and your spouse are over 65, you can earn up to $28,700 before paying taxes [source: IRS].
A qualifying widow or widower over the age of 65 making less than $27,300 (or less than $25,900 if under the age of 65) doesn't have to pay either. The IRS also exempts self-employed people who earn less than $400 [source: IRS].
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Dependents and some disabled persons are also exempt. These include those depending on another for income as well as individuals dependent on welfare benefits, or Supplemental Security Income, which many people with permanent disabilities receive. Some Social Security recipients are also tax-exempt, depending on their income level.
The tax code is not only used as the basis for collecting revenue, but also to encourage and reward certain activities. Taxpayers who would normally pay taxes can limit or eliminate their liability by taking advantage of available tax credits, such as child care credits, saver's credit and education credits like the American Opportunity and Lifetime Learning credits, which can be claimed for tuition, course materials and certain fees.
Why Are Churches Tax-exempt?
Although not mandated by the Constitution, churches are tax-exempt because they are considered public charities under U.S. tax laws. Charitable organizations, also known as Section 501(c)(3) groups, are allowed to promote religion as their charitable work [source: Fishman].
