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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 24, 2023):

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) $466 $777 $936 $1,123
Housekeeping supplies (includes laundry and cleaning supplies, stationery supplies, postage, delivery services, miscellaneous household products, and lawn/ garden supplies) $47 $80 $85 $90
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) $96 $145 $207 $252
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) $43 $78 $91 $97
Miscellaneous $189 $309 $381 $431
Total $841 $1,389 $1,700 $1,993

* For each additional person, add $356 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

$79

65 and older

$154


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 $1,142
$1,341 $1,413 $1,575 $1,601
Marin County, California $3,971 $4,664 $4,915 $5,480 $5,569
Honolulu County, Hawaii $2,844 $3,340 $3,520 $3,925 $3,988
Cook County, Illinois $2,193 $2,576 $2,714 $3,026 $3,075
Anne Arundel County, Maryland $2,411 $2,832 $2,984 $3,327 $3,381
Carson City, Nevada $1,790 $2,102 $2,215 $2,470 $2,510
Merrimack County, New Hampshire $2,126 $2,497 $2,631 $2,934 $2,981
New York County, New York $3,619 $4,251 $4,479 $4,994 $5,075
Polk County, Oregon $1,912 $2,245 $2,366 $2,638 $2,681
Aiken County, South Carolina $1,421 $1,669 $1,759 $1,961 $1,872
Briscoe County, Texas $1,475
 $1,732 $1,825 $2,035 $2,068
Juneau County, Wisconsin $1,483 $1,741 $1,835 $2,046 $2,079

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 $218
National Vehicle Ownership Costs $629 for 1 car $1,258 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:
$298 $596
Boston $294 $588
New York $379 $758
Philadelphia $318 $636
Midwest Region including ND, SD, NE, KS, MO, IL, IN, OH, MI, WI, MN, IA, except the following cities: $225 $450
Chicago $265 $530
Cleveland $225 $450
Detroit $315 $630
Minneapolis-St. Paul $214 $428
St. Louis$244$488
South Region including TX, OK, AK, LA, MS, TN, KY, WV, VA, MD, DC, DE, NC, SC, GA, FL, AL, except the following cities: $242 $484
Atlanta $300 $600
Baltimore $277 $554
Dallas-Ft. Worth $288 $576
Houston $312 $624
Miami $364 $728
Tampa
$297
$594
Washington, D.C. $294 $588
West Region including NM, AZ, CO, WY, MT, NV, UT, WA, OR, ID, CA, AK, HI, except the following cities: $264 $528
Anchorage$208$416
Denver$279$558
Honolulu$243$486
Los Angeles $339 $678
Phoenix $271 $542
San Diego $322 $644
San Francisco $301 $602
Seattle $281 $562


   

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