Five broad categories of U.S. taxpayers are exempt from the federal tax process. It can sometimes be a good idea to file, however, just to establish that you don't owe anything for one of these five reasons.
1. Not-for-Profit Organizations
Section 501(c)3 of the Internal Revenue Code (IRC) dictates that any organization that qualifies to be classified under this section is exempt from paying income taxes.
2. U.S. Citizens Working Abroad
You may not have to pay taxes to Uncle Sam on the income you earn there if you live and work overseas, Americans can earn up to $126,500 working abroad before they have to pay taxes for tax year 2024 because the IRC provides a foreign earned income exclusion. It's indexed for inflation. The amount is $130,000 for tax year 2025.
3. Low-Income Taxpayers
You don't have to pay taxes or file a tax return if you earn an income that doesn't exceed the amount of the standard deduction for your filing status. A married couple must earn at least $29,200 in 2024 before they're required to file a tax return in 2025 if each spouse is under age 65. For tax year 2025, a married couple must earn at least $30,000.
4. Taxpayers With Many Deductions
Some taxpayers can write off most or all their taxable incomes by claiming deductions. Someone who incurs a substantial medical bill may be able to claim this on Schedule A as an unreimbursed medical expense. This can drastically reduce their taxable income, possibly to the point where it falls below the taxable threshold.
5. Taxpayers With Many Dependents
Lower-income families with dependent children might not have to pay taxes if they qualify for the Earned Income Tax Credit (EITC) and other child-related tax credits.
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