Many Boston residents are under the impression that the vast majority of people not paying taxes are rich or receiving government benefits. The general consensus is that these are the people who “cheat” the system and avoid paying the IRS. Well, it may surprise some people to learn that a large number of the nearly 44%, down from 47%, of people who do not always pay income taxes are far from rich or are not receiving government benefits.
Well, technically, many of that percentage do receive government benefits, but they earned them during their working years. They are the people trying to get by on Social Security benefits. In fact, approximately 80% of the people who do not pay income taxes are at least 80 years old, according to the Tax Policy Center. Another 11% comes from people of working age who are between the age of 25 and 55. The remainder consists of people younger than 25.
The primary reason that older Americans, including many here in Boston, do not pay taxes is that they do not make enough money each year to do so. People who are at least 65 years old no longer have a legal obligation to pay taxes if they receive income of no more than $13,600 per year. It may disturb some people to know that many of these individuals do not make over $15,000 per year.
After working for years, people who rely only on Social Security who do not make enough to reach the poverty level do not have to pay taxes. The IRS recognizes that people in this category need as much of their yearly income as possible just to live. Contrary to popular belief, many of the “rich” pay at least some taxes, and those on government benefits do not consistently find themselves exempt from payments.