How Do You Pay Zero Taxes?


Quick Answer

Ways to pay zero taxes including being poor, being extremely rich, being retired and having several itemized deductions. Roughly 50 percent of Americans do not pay taxes, according to Nolo.

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Full Answer

An individual who doesn't have children and makes less than $15,000 a year doesn't have to pay taxes, and the same applies to those with families who make less than $30,000 a year. This is due to personal exemptions and regular deductions.

The earned income tax credit, child tax credit, and the child and dependent care credit might apply to an individual who has children, causing him to not have to pay taxes. There's even a chance that the individual receives money back from the IRS.

An individual who is retired and doesn't have much of an income might be exempt from paying taxes because of tax breaks for senior citizens. The largest exemption for retirees is Social Security benefits.

A taxpayer with a sizable income can avoid paying taxes if he qualifies for enough itemized deductions, or if he has tax-exempt income through certain investments. Examples of itemized deductions include medical expenses, donating to charity, and paying interest on a mortgage.

Buying up real estate and stocks without selling them is another way to avoid paying taxes. The reason for that is because appreciating assets aren't taxed until they're sold.

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