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How Much Does the IRS Let Delinquent Taxpayers Live On?

Posted on Fri, May 28, 2021

The IRS uses "Collection Financial Standards" to help determine a taxpayer's ability to pay a delinquent tax liability. Allowable living expenses include those that meet the test of being necessary to provide for a taxpayer's (and his or her family's) health and welfare, as well as his or her ability to produce income.

The IRS allowable living standards are designed to incorporate necessary items including a category for out-of-pocket health care expenses and an allowance for cell phones.

Higher costs may be allowed by the IRS if a taxpayer can prove that these amounts are inadequate.

Here are four categories showing the basic amounts allowed by the IRS in calculating delinquent tax payment amounts (effective April 26, 2021):

1. Food, Clothing and Miscellaneous Items

National monthly standards have been established for five necessary expenses of food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous items.

Monthly Expense One Person Two Persons Three Persons Four Persons*
Food (includes food at home and food away from home) $400 $724 $838 $955
Housekeeping supplies (includes laundry and cleaning supplies, stationery supplies, postage, delivery services, miscellaneous household products, and lawn/ garden supplies) $41 $76 $69 $79
Apparel/ services (includes clothing, footwear, material, patterns and notions for making clothes, alterations and repairs, clothing rental, clothing storage, dry cleaning and sent-out laundry, watches, jewelry and repairs to watches and jewelry) $92 $150 $191 $259
Personal care products/ services (includes products for the hair, oral hygiene products, shaving needs, cosmetics and bath products, electric personal care appliances, and other personal care products) $42 $76 $72 $89
Miscellaneous $148 $266 $303 $358
Total $723 $1,292 $1,473 $1,740

* For each additional person, add $341 to the four-person total allowance


2. Health Care

National out-of-pocket health care standards have been established for out-of-pocket expenses including medical services, prescription drugs, medical supplies, eyeglasses, contact lenses, etc. This monthly amount is allowed per person in addition to what is paid for health insurance.

Age

Monthly Out-of-Pocket Health Costs

Under age 65

$68

65 and older

$142


3. Housing and Utilities

The monthly standards for housing and utilities are determined on a local basis. The amounts allowed for a particular area and family size cover a taxpayer's primary residence. They include mortgage or rent, property taxes, interest, insurance, maintenance, repairs, gas, electric, water, heating oil, garbage collection, telephone and cell phone.

As you might expect, the allowances vary widely across the nation. Here are some examples:

Area

Family of 1

Family of 2

Family of 3

Family of 4

Family of 5 or more

Chicot County, Arkansas $  1,004
$1,179 $1,242 $1,385 $1,407
Marin County, California $3,332 $3,914 $4,124 $4,598 $4,672
Honolulu County, Hawaii $2,457  $2,886 $3,041 $3,391 $3,445
Cook County, Illinois $1,882 $2,210 $2,329 $2,597 $2,639
Anne Arundel County, Maryland $2,073 $2,435 $2,566 $2,861 $2,907
Carson City, Nevada $1,490 $1,750 $1,844 $2,056 $2,089
Merrimack County, New Hampshire $1,839 $2,160 $2,276 $2,538 $2,579
New York County, New York $3,073 $3,609 $3,803 $4,240 $4,309
Polk County, Oregon $1,592 $1,870 $1,970 $2,197 $2,232
Aiken County, South Carolina $1,216 $1,428 $1,505 $1,678 $1,705
Briscoe County, Texas $1,053
 $1,237 $1,303 $1,453 $1,476
Juneau County, Wisconsin $1,274 $1,497 $1,577 $1,758 $1,787

4. Transportation

Transportation standards for taxpayers with a vehicle consist of two parts:

  • Nationwide amounts for monthly loan or lease payments — called ownership costs.
  • Additional amounts for monthly operating costs, which include repairs, maintenance, insurance, fuel, registration, inspection, parking and tolls.

There's also a single nationwide public transportation allowance.


Monthly Transportation Allowances
National Public Transportation — Fares $217
National Vehicle Ownership Costs $533 for 1 car $1,066 for 2 cars

Operating Costs by Area 1 Car 2 Cars
Northeast Region including ME, NH, VT, MA, RI, CT, PA, NY, NJ,
except the following cities:
$274 $548
Boston $271 $542
New York $355 $710
Philadelphia $293 $586
Midwest Region including ND, SD, NE, KS, MO, IL, IN, OH, MI, WI, MN, IA, except the following cities: $201 $402
Chicago $226 $452
Cleveland $201 $402
Detroit $305 $610
Minneapolis-St. Paul $203 $406
St. Louis $233 $466
South Region including TX, OK, AK, LA, MS, TN, KY, WV, VA, MD, DC, DE, NC, SC, GA, FL, AL, except the following cities: $224 $448
Atlanta $251 $502
Baltimore $262 $524
Dallas-Ft. Worth $277 $554
Houston $309 $618
Miami $379 $758
Tampa
$238
$476
Washington, D.C. $247 $494
West Region including NM, AZ, CO, WY, MT, NV, UT, WA, OR, ID, CA, AK, HI, except the following cities: $242 $484
Anchorage $203 $406
Denver $267 $534
Honolulu $210 $420
Los Angeles $313 $626
Phoenix $246 $492
San Diego $280 $560
San Francisco $267 $534
Seattle $242 $484