Wage Levies/Garnishments

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You have the right to representation by an Enrolled Agent (EA), CPA or Attorney.
You don't have to face the IRS alone, or at all!

An IRS wage levy is brutal.  They take about 90% of your pay check!  For a single individual they only leave you about $139 per week to live on.  For a family of 3 they only leave you about $419 per week to live on.  This is definitely going to create a hardship!

If the IRS has levied your pay check you may be able to negotiate a full or partial release. In most cases a release can be negotiated along with an installment agreement.

What's Exempt from Levy

When the IRS levies your wages, they allow you to keep a specified amount based on your filing status and exemptions.   Basically the IRS lets you keep an amount specified by the tables below after legal withholdings from your paycheck.  What are legal withholdings?  FICA (Social Security & Medicare), Income Taxes, and certain Court Ordered Payments.

Examples - approximations (Source: Publication 1494)

Single paid once a week. Earning $16/hr for 40 hrs /week
Gross Weekly Earnings 640.00
FICA Withholding -48.96
Federal Withholding -96.00
State Withholding -38.40
Net of Legal Withholdings 456.64
 
IRS Allows You to Keep 195.19
 
IRS Gets 261.45
 
Other Payroll Deductions  
Union Dues -12.00
Charity Contributions -5.00
401K -32.00
 
Your Net Paycheck 146.19

This leaves a single person approximately $629 per month to live on. Hardly enough.

 

Married filing Jointly, paid biweekly. Earning $18/hr for 40 hrs /week. 1 child, (3 exemptions claimed).
Gross Bi-Weekly Earnings 1,440.00
FICA Withholding -110.16
Federal Withholding -216.00
State Withholding -72.00
Net of Legal Withholdings 1,041.84
 
IRS Allows You to Keep 932.69
 
IRS Gets 109.15
 
Other Payroll Deductions  
Union Dues -18.00
Charity Contributions -5.00
401K -43.20
 
Your Net Paycheck 866.49

This leaves a family of 3 people approximately $1,801 per month to live on. Hardly enough.

Source: Publication 1494 Jan 2014


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