Donald Trump paid $0 in taxes in 2020. He's not alone: 60% of households paid no federal income tax

[Yo_Mama_Been_Loggin]

Former President Donald Trump and his wife, Melania, paid $0 in income taxes for 2020, according to a report released late Tuesday by the congressional Joint Committee on Taxation.

-snip-

But the reason that the Trumps paid nothing in taxes — that is, their reported loss of almost $5 million — is vastly different from the reason that most of that other 60% of Americans paid nothing in 2020.

People who earn less than the standard deduction — which for 2022 is $12,950 for individuals and $25,900 for married couples filing jointly — do not owe federal income taxes (although tax experts say it is still a good idea to file a return in order to access tax credits such as the earned-income tax credit and the child tax credit).

Of course, people who don’t pay federal income taxes still pay sales taxes, property taxes and other kinds of taxes. And many people who work and who don’t owe any federal income taxes still have money taken out of their paychecks for Social Security and Medicare.

https://www.msn.com/en-us/money/personalfinance/donald-trump-paid-0-in-taxes-in-2020-he-s-not-alone-60-of-households-paid-no-federal-income-tax-that-year-but-for-very-different-reasons/ar-AA15MU9F

[BSdetect]

1. And many people pay extra taxes when their income exceeds various limits

making credits and such, out of reach.

[Biophilic]

2. So 40% of us are supporting the whole thing.

That can’t be sustainable. Certainly it puts an incredible burden on the 40%. Something has to change.

[spooky3]

3. Individuals and corporate income tax nt

[Salviati]

4. Right, the wages of those making below the standard deduction need to be increased.

Too many people are living in poverty. The system is too top heavy to be sustainable.

[Thomas Hurt]

5. I seriously doubt that the reason the Pig doesn't pay any taxes is because that is the way it works

for most people. I think it is likely he committed fraud if not for that particular year then in one or more of the others.

I don't see how state or federal tax agency can believe a thing he files.

[Emile]

6. Socialism for corporations and the rich, yeehaw

[LiberalArkie]

7. I did not pay any. I do not meet the minimum with my Social Security.

[progree]

8. Earn too little to file? Be sure to file if eligible for the child tax credit and/or the EITC

In 2006, a low income self-employed single parent friend of mine paid no income tax during the year (either through withholding or estimated tax payments) and got a $900 income tax check from the federal government. That was what was left over after they paid her $2500 FICA taxes! Effectively a $3400 negative income tax, of which $2500 went to pay FICA taxes. That's because the earned income tax and child tax credit are what are called refundable tax credits.

She also got a sizable refund from the state.

Just to be clear: I'm not talking about a refund of some taxes paid in during the year through withholding or estimated tax payments or with their tax returns.

I'm talking about people who have paid in nothing in income taxes or FICA (SS and Medicare) taxes (nor have their employers -- they are self-employed), but get money from the federal government after they file their tax returns. Or those who have paid in some taxes, but get all that back, plus some more.

An acquaintance of hers, also self-employed in an off-the-books area of the economy, also with a child, and I'd guess a similar low income, never filed because she didn't want to pay income taxes. Smart? Even though she never got caught AFAIK, she missed out on the kind of refunds my friend got. And since she didn't pay any FICA taxes, her contribution to Social Security and Medicare were zero.

One needs to pay into Social Security and Medicare for 40 quarters (10 years) to be eligible for their benefits. (There might be some partial benefits for fewer quarters, I'd have to check). Anyway, had she kept this up, she would have reached old age with no Medicare and no Social Security. Fortunately, I think she has since worked in jobs where there is no way to avoid paying into the system.

However, Social Security benefits are based on the highest 35 years of income. With so many years of "0" income, her Social Security benefit will be considerably less than if she had filed taxes like my friend did.