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 March 25, 2019):

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) $386 $685 $786 $958
Housekeeping supplies (includes laundry and cleaning supplies, stationery supplies, postage, delivery services, miscellaneous household products, and lawn/ garden supplies) $40 $72 $76 $76
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) $88 $159 $169 $263
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 $70 $76 $91
Miscellaneous $170 $302 $339 $418
Total $727 $1,288 $1,446 $1,786

* For each additional person, add $420 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

$55

65 and older

$114

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 $  976 $1,146 $1,208 $1,347 $1,369
Marin County, California $3,139 $3,687 $3,885 $4,332 $4,402
Honolulu County, Hawaii $2,326  $2,732 $2,879 $3,210 $3,262
Cook County, Illinois $1,804 $2,119 $2,233 $2,490 $2,530
Anne Arundel County, Maryland $2,009 $2,360 $2,487 $2,773 $2,818
Carson City, Nevada $1,403 $1,647 $1,736 $1,936 $1,967
Merrimack County, New Hampshire $1,790 $2,102 $2,215 $2,470 $2,510
New York County, New York $2,870 $3,371 $3,552 $3,960 $4,024
Polk County, Oregon $1,516 $1,780 $1,876 $2,092 $2,126
Aiken County, South Carolina $1,197 $1,405 $1,481 $1,651 $1,678
Briscoe County, Texas $  993
 $1,166 $1,229 $1,370 $1,392
Juneau County, Wisconsin $1,226 $1,440 $1,517 $1,691 $1,719

 

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 $217
National Vehicle Ownership Costs $508 for 1 car $1,016 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:
$237 $474
Boston $230 $460
New York $319 $638
Philadelphia $244 $488
Midwest Region including ND, SD, NE, KS, MO, IL, IN, OH, MI, WI, MN, IA, except the following cities: $191 $382
Chicago $208 $416
Cleveland $191 $382
Detroit $277 $554
Minneapolis-St. Paul $197 $394
South Region including TX, OK, AK, LA, MS, TN, KY, WV, VA, MD, DC, DE, NC, SC, GA, FL, AL, except the following cities: $210 $420
Atlanta $240 $480
Baltimore $258 $516
Dallas-Ft. Worth $281 $562
Houston $287 $574
Miami $316 $632
Tampa
$236
$472
Washington, D.C. $242 $484
West Region including NM, AZ, CO, WY, MT, NV, UT, WA, OR, ID, CA, AK, HI, except the following cities: $205 $410
Anchorage $179 $358
Denver $212 $424
Honolulu $191 $382
Los Angeles $273 $546
Phoenix $233 $466
San Diego $255 $510
San Francisco $212 $424
Seattle $268 $536