Does tax exemption depend on net pay or gross pay?

I qualify for tax exemption because im independent and i make less than 12,000 a year. But does tax exemption depend on net pay or gross pay. Right now my net pay is 10,600 but my gross is at 12,000. Does anyone know? I dont want to owe the IRS but i if possible i want to avoid paying federal tax bc i barely make anything as is.

7 Answers

Relevance
  • 3 weeks ago

    Gross pay is what counts.

  • 3 weeks ago

    $12,000 is your standard deduction as a single filer. It is the reason why you owe no federal income tax on your first $12,000 of income. If your gross is at $12,000 now, you're going to owe a small amount. Figure on owing 10% of anything you gross for the year in excess of $12,000. If you gross $14,000, you'll owe about $200 in federal.

    But you may not have to pay anything when you file your return. Your employer may have withheld more in tax than what you owe, and you would get the difference in a refund.

  • 3 weeks ago

    Gross pay, of course.

  • 3 weeks ago

    Gross pay. And you are better off saying S-5 than "exempt" b/c the rules are more lenient.

  • How do you think about the answers? You can sign in to vote the answer.
  • 3 weeks ago

    Sometimes, gross Sometimes neither. Never net.

    If everything taken out of your pay (the $11,400 difference between gross and net) was for taxes, then gross.

    If some of it was for health insurance, 401K, etc., then neither. It depends on gross minus health insurance, 401K, etc., (which would generally be the same as net plus tax withholdings).

  • NA
    Lv 7
    3 weeks ago

    If your ONLY income is from wages, your standard deduction can go up to $12,200 in 2019 even though you are apparently a dependent.

    Keep in mind, if you *knew* you were going to exceed $12,200, you weren't supposed to use exempt.  HOWEVER, the next $9700 is taxed at 10% and if you can write a check and pay it at tax time, no harm, no foul because it won't go over $1000.

  • Eva
    Lv 7
    3 weeks ago

    Your Gross income is the income you report on your tax return. If you are not a dependent you would not owe income tax as your income is less than the standard deduction. If you are a dependent you do not get the full standard deduction so would not be exempt from tax.

    • NA
      Lv 7
      3 weeks agoReport

      His standard deduction floats between $1100 and $12200 for 2019, with the formula being earnings plus $350.  He's just $200 short of the $12,200, but if he keeps working will owe.

Still have questions? Get your answers by asking now.