I’m a Single Parent with Two Kids. How Much Money Does the IRS Take for a Wage Garnishment?

When you receive a letter from the IRS stating that they are going to enact a wage garnishment to collect your federal tax debt, one of the biggest concerns you have is most likely the amount of money you with which you will be left. As a single parent, you need to make sure you can still afford to take care of your children.

For most wage garnishments, Title III of the Consumer Credit Protection Act limits the amount of your salary that can be taken to just 25 percent of your disposable income. Instead of limiting the amount garnished, the IRS follows its own rules and selects a certain amount of your income that is exempt from being garnished. They have determined this based on what they believe is the average cost of living for your filing status. This amount is based on your filing status and number of dependents (or exemptions) claimed on your taxes, which the IRS publishes in a table.

Figuring Out the Exempt Amount

Because the IRS goes off of an exempt amount rather than a maximum percentage, they can take a significant portion of your income. Whether you make minimum wage or bring in a six-figure paycheck, the IRS leaves the same amount of money when they enact a wage garnishment.

For a single parent with two children, you could be left with one of two amounts. If you file as single with two exemptions claimed, then you will be left with $1191.67 per month. If you file as head of household, you will retain slightly more money at $1437.50 per month.

The IRS also breaks down the amount depending on how often you are paid, although it still adds up to roughly $1200 a month for single filers and $1500 per month for head of household. For example, single filers who receive daily paychecks are left with $55, weekly paychecks are left with $275, biweekly are left with $550, and semimonthly payments are left with $595.83. Any amount of money you receive beyond this goes towards your tax debt.

How Much the IRS Takes

The amount the IRS takes varies, depending on how much money you make. To simplify, estimate that the IRS leaves you with $1200 per month. If you only make $1200 per month, then the IRS will look for other collective action, as they will not be able to take any money from your wages. If you make $2000 per month, then the IRS will take $800, while if you make $5000 per month, then the IRS will take $3800.

The Negative Impact of a Wage Garnishment

An IRS wage garnishment can cause financial problems because you may not be able to pay all your required expenses with this $1200. Even though the IRS determined this exempt amount is enough to live, it typically creates financial difficulty. In many places, people’s rent or mortgage alone costs around $1000, if not more. You also have to budget for groceries, utilities, gas, car payments, and other necessary expenses with these funds. This is why many people find themselves in serious financial difficulty after the IRS enacts a wage garnishment.

Wage Garnishment Help

You do have a way to stop a wage garnishment and get over your federal tax debt. One of the best solutions is to sign up for an Installment Agreement, where you determine the amount of money to pay the IRS every month. You negotiate a settlement to pay off your debt with monthly payments over a period of time, typically 5 years. For example, you can choose to pay $500 per month, which could save you a significant amount of money, depending on your paycheck. A single parent bringing in $3000 per month would have to pay $1800 per month in a wage garnishment situation. After negotiating an Installment Agreement for $500, this person is left with $2500 per month, or an extra $700 per month.

You have other choices for getting rid of your IRS wage garnishment as well. Call 877-372-2520 to speak with the tax professionals at Fidelity Tax Relief about your situation and find out the best way to resolve your federal tax debt.

Get Tax Help

Let Fidelity Tax Relief Help

Our experienced agents can help resolve your tax issues.
Get Tax Help