"AskTony" column archive

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Minimal taxable income

originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email asktony@tonynovak.com.

Q: I am not working at all this year and do not expect to. In fact my only income is will be $3,600.00 from a CD. I know that the poverty level is $8,200.00 but will I have to still pay taxes on the interest from he CD? I know CD's are taxable income.

A: If this is your only income and you file taxes on your own (and not as someone else's dependent), then you will not owe any federal income tax. This is because even though interest is taxable income, you fall below the minimum total income for the year after taking the allowable "personal exemption" and "standard deduction" on the tax return. You do, however, have to file the tax return showing that you owe no tax.

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