Tax Installment Agreements

National Standard Expenses

Privacy Statement

Warning   

CLICK AN IMAGE OR READ ON      

Question or Topic

What is the IRS position about my personal living expenses that are necessary?  May I pay those expenses before I pay the IRS?

The Answer

General

Collection Financial Standards are used to help determine a taxpayer's ability to pay a delinquent tax liability.

Allowances for food, clothing and other items, known as the National Standards, apply nationwide except for Alaska and Hawaii, which have their own tables. Taxpayers are allowed the total National Standards amount for their family size and income level, without questioning amounts actually spent.

Maximum allowances for housing and utilities and transportation, known as the Local Standards, vary by location. Unlike the National Standards, the taxpayer is allowed the amount actually spent or the standard, whichever is less.

Food, Clothing and Other Items

All standards except miscellaneous are derived from the Bureau of Labor Statistics (BLS) Consumer Expenditure Survey (CES). The miscellaneous standard has been established by the IRS.

Transportation

The transportation standards consist of nationwide figures for monthly loan or lease payments referred to as ownership costs, and additional amounts for monthly operating costs broken down by Census Region and Metropolitan Statistical Area (MSA). Public transportation is included under operating costs. A conversion chart has been provided with the standards which shows which IRS districts fall under each Census Region, as well as the counties included in each MSA. The ownership cost portion of the transportation standard, although it applies nationwide, is still considered part of the Local Standards.

The ownership costs provide maximum allowances for the lease or purchase of up to two automobiles if allowed as a necessary expense. The operating costs are derived from BLS data.

If a taxpayer has a car payment, the allowable ownership cost added to the allowable operating cost equals the allowable transportation expense. If a taxpayer has no car payment, or no car, only the operating costs portion of the transportation standard is used to come up with the allowable transportation expense.

Necessary Expenses are the allowable payments you make to support you and your family's health and welfare and/or the production of income. This expense allowance does not apply to business entities. Our Publication 1854 explains the National Standard Expenses and gives the allowable amounts. We derive these amounts from the Bureau of Labor Statistics (BLS) Consumer Expenditure Survey. We also use information for the Bureau of the Census to determine local expenses for housing, utilities, and transportation.

Note: If the IRS determines that the facts and circumstances of your situation indicates that using the scheduled allowance of necessary expenses is inadequate, we will allow you an adequate means for providing basic living expenses. However, you must provide documentation that supports a determination that using national and local expense standards leaves you an inadequate means of providing for basic living expenses.

Expenses Not Generally Allowed -- We typically do not allow you to claim tuition for private schools, public or private college expenses, charitable contributions, voluntary retirement contributions, payments or unsecured debts such as credit card bills, cable television charges and other similar expenses as necessary living expenses. However, we can allow these expenses when you can prove that they are necessary for the health and welfare of you or your family or for the production of income.

Total Monthly National Standards

Except Alaska and Hawaii

Back to General or Back to Answer

Monthly National Standards

Two Persons	Gross Monthly Income
Item	Less than $830	$831 to $1,249	$1,250 to $1,669	$1,670 to $2,499	$2,500 to $3,329	$3,330 to $4,169	$4,170 to $5,829	$5,830 and over
Food	228	277	351	365	424	438	515	635
Housekeeping supplies	23	27	28	40	46	51	57	74
Apparel & services	71	72	98	121	128	167	202	335
Personal care products & services	19	24	28	34	46	49	58	66
Miscellaneous	125	125	125	125	125	125	125	125
Total	466	525	630	685	769	830	957	1,235

Back to General or Back to Answer

Three Persons	Gross Monthly Income
Item	Less than $830	$831 to $1,249	$1,250 to $1,669	$1,670 to $2,499	$2,500 to $3,329	$3,330 to $4,169	$4,170 to $5,829	$5,830 and over
Food	272	326	390	406	444	488	545	737
Housekeeping supplies	24	28	29	41	47	55	58	77
Apparel & services	110	114	134	143	175	205	206	368
Personal care products & services	23	28	34	41	47	50	59	67
Miscellaneous	150	150	150	150	150	150	150	150
Total	579	646	737	781	863	948	1,018	1,399

Four Persons	Gross Monthly Income
Item	Less than $830	$831 to $1,249	$1,250 to $1,669	$1,670 to $2,499	$2,500 to $3,329	$3,330 to $4,169	$4,170 to $5,829	$5,830 and over
Food	374	376	406	416	472	574	629	777
Housekeeping supplies	36	37	38	46	49	57	60	78
Apparel & services	114	145	146	147	179	206	244	369
Personal care products & services	27	29	35	46	49	51	62	74
Miscellaneous	175	175	175	175	175	175	175	175
Total	726	762	800	830	924	1,063	1,170	1,473

More Than Four Persons	Gross Monthly Income
Item	Less than $830	$831 to $1,249	$1,250 to $1,669	$1,670 to $2,499	$2,500 to $3,329	$3,330 to $4,169	$4,170 to $5,829	$5,830 and over
For each additional person, add to four-person total allowance:	125	135	145	155	165	175	185	195

Back to General or Back to Answer

* Standards do not include personal property taxes.

The Operating Costs and Public Transportation Costs section of the Transportation Standards are provided by Census Region and Metropolitan Statistical Area (MSA). The following table lists the states which comprise each Census Region. Once the taxpayer’s Census Region has been ascertained, to determine if an MSA standard is applicable, use the definitions below to see if the taxpayer lives within an MSA (MSAs are defined by county and city, where applicable). If the taxpayer does not reside in an MSA, use the regional standard.

Back to General or Back to Answer

 

Northeast Census Region: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, Pennsylvania, New York, New Jersey
MSA	COUNTIES
New York	in NY:	Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester
	in NJ:	Bergen, Essex, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, Warren
	in CT:	Fairfield, Litchfield, Middlesex, New Haven
	in PA:	Pike
Philadelphia	in PA:	Bucks, Chester, Delaware, Montgomery, Philadelphia
	in NJ:	Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Salem
	in DE:	New Castle
	in MD:	Cecil
Boston	in MA:	Bristol, Essex, Hampden, Middlesex, Norfolk, Plymouth, Suffolk, Worcester
	in NH:	Hillsborough, Merrimack, Rockingham, Strafford
	in CT:	Windham
	in ME:	York
Pittsburgh		Allegheny, Beaver, Butler, Fayette, Washington, Westmoreland
Buffalo		Erie, Niagara
Midwest Census Region: North Dakota, South Dakota, Nebraska, Kansas, Missouri, Illinois, Indiana, Ohio, Michigan, Wisconsin, Minnesota, Iowa
MSA	COUNTIES (unless otherwise specified)
Chicago	in IL:	Cook, DeKalb, DuPage, Grundy, Kane, Kankakee, Kendall, Lake, McHenry, Will
	in IN:	Lake, Porter
	in WI:	Kenosha
Detroit		Genesee, Lapeer, Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, Wayne
Milwaukee		Milwaukee, Ozaukee, Racine, Washington, Waukesha
Minneapolis- St. Paul	in MN:	Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, Wright
	in WI:	Pierce, St. Croix
Cleveland		Ashtabula, Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, Summit
Cincinnati	in OH:	Brown, Butler, Clermont, Hamilton, Warren
	in KY:	Boone, Campbell, Gallatin, Grant, Kenton, Pendleton
	in IN:	Dearborn, Ohio
St. Louis	in MO:	Crawford, Franklin, Jefferson, Lincoln, St. Charles, St. Louis, Warren, St. Louis city
	in IL:	Clinton, Jersey, Madison, Monroe, St. Clair
Kansas City	in MO:	Cass, Clay, Clinton, Jackson, Lafayette, Platte, Ray
	in KS:	Johnson, Leavenworth, Miami, Wyandotte
South Census Region: Texas, Oklahoma, Arkansas, Louisiana, Mississippi, Tennessee, Kentucky, West Virginia, Virginia, Maryland, District of Columbia, Delaware, North Carolina, South Carolina, Georgia, Florida, Alabama
MSA	COUNTIES (unless otherwise specified)
Washington, D.C.	District of Columbia
	in MD:	Calvert, Charles, Frederick, Montgomery, Prince George’s
	in VA:	Arlington, Clarke, Culpepper, Fairfax, Fauquier, King George, Loudoun, Prince William, Spotsylvania, Stafford, Warren, Alexandria city, Fairfax city, Falls Church city, Fredericksburg city, Manassas city, Manassas Park city
	in WV:	Berkeley, Jefferson
Baltimore		Anne Arundel, Baltimore, Carroll, Harford, Howard, Queen Anne’s, Baltimore city
Atlanta		Barrow, Bartow, Carroll, Cherokee, Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Spalding, Walton
Miami		Broward, Dade
Tampa		Hernando, Hillsborough, Pasco, Pinellas
Dallas-Ft. Worth		Collin, Dallas, Denton, Ellis, Henderson, Hood, Hunt, Johnson, Kaufman, Parker, Rockwall, Tarrant
Houston		Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, Waller
West Census Region: New Mexico, Arizona, Colorado, Wyoming, Montana, Nevada, Utah, Idaho, Washington, Oregon, California, Alaska, Hawaii
MSA	COUNTIES (unless otherwise specified)
Los Angeles		Los Angeles, Orange, Riverside, San Bernadino, Ventura
San Francisco		Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, Sonoma
San Diego		San Diego
Portland	in OR:	Clackamas, Columbia, Marion, Multnomah, Polk, Washington, Yamhill
	in WA:	Clark
Seattle		Island, King, Kitsap, Pierce, Snohomish, Thurston
Honolulu		Honolulu
Anchorage		Anchorage borough
Phoenix		Maricopa, Pinal
Denver		Adams, Arapahoe, Boulder, Denver, Douglas, Jefferson, Weld

Solutions are dependent upon facts & circumstances, law and the objectives.  These elements vary from one time to another, from one circumstance to another and from person or entity to another

Back to General or Back to Answer

 Engagement Status Letter ~ WARNING!

WARNINGS ABOUT THIS SITE'S CONTENT~ Terms & Conditions

THE FOLLOWING APPLIES TO ALL PAGES, TEXT, IMAGES AND CONTENT OF THIS SITE   This entire site is for educational or informational purposes only.   You are not to use the forms, concepts, strategies, or knowledge without assistance from a professional.   The author, the corporation, the ISP, Bob Parrish CPA, Bob Parrish CPA, P.C. or other parties related to those or this site do not guarantee or warrantee in any manner the suitability, usefulness, accuracy, timeliness, or results of any portions of this site, nor the links contained in this site which link to other areas.   At times, information is taken from other sources and is believe to be accurate, but no verification or confirmation is performed.  Furthermore, if any federal or state law invalidates a portion of this disclaimer, the other portions still apply.   In addition, any allegations or actions are restricted to arbitration only and must be arbitrated by the Better Business Bureau in Sarasota Florida.  Reading of these pages constitutes complete acceptance and agreement with all disclaimer provisions on all pages of this site. Material provided herein is based upon the most recently available information and is subject to change. It is not intended to be complete and should not be used to make any type of decisions. All should consult a qualified tax adviser and other professional(s) for more complete information.   You have not engaged Bob Parrish CPA PC, Bob Parrish CPA, pro1040, Consulting on line, any related parties, or the ISP to perform any services for you or offer you advice.  This entire site is for educational or informational purposes only.   The materials are not opinions, advise, legal advice on any matter and have not been tailored to specific jurisdictions, individuals, other entities, or circumstances.  You are not to use the forms, concepts, strategies, or knowledge without assistance from a professional.   You must update and validate this information yourself with your own research, experience and the advice of a competent professional adviser in your jurisdiction.  The author, the corporation, the ISP, Bob Parrish CPA, Bob Parrish CPA, P.C. or other parties related to those or this site do not guarantee or warrantee in any manner the suitability, usefulness, accuracy, timeliness, or results of any portions of this site, nor the links contained in this site which link to other areas.   At times, information is taken from other sources and is believed to be accurate, but no verification or confirmation is performed.  Furthermore, if any federal or state law invalidates a portion of this disclaimer, the other portions still apply.   In addition, any allegations or actions are restricted to arbitration only and must be arbitrated by the Better Business Bureau in Sarasota Florida.  The cost of arbitration to the complainant is restricted to the cost through a court having jurisdiction in the matter including if allowed by law the cost of legal fees.  Reading of these pages constitutes complete acceptance and agreement with all disclaimer provisions on all pages of this site. ....... Sunday, March 04, 2007 08:48 AM    All funds, bonds, partnerships, variable insurance products and other securities are not FDIC insured, not bank insured, and not guaranteed by any party, and are offered by prospectus only. You should consult your financial advisor for a prospectus before investing. Please read the prospectus, which contains more complete information on risk considerations, management fees, sales charges, and other expenses, carefully before you invest.  The value of the investment does change and the value will be more or less than your investment.  Historical performance is not indicative of futures results and future results cannot be predicted or guaranteed. Bob Parrish CPA:  License Jurisdictions — CPA: FL, TX   Privacy Statement

Email to pro1040@home.com

Privacy Statement

Or If you want to use your own email editor click here