Options for Avoiding the Payroll Tax

In ’s Picket Line entry I wondered how someone like me could continue to earn a modest living but not have to pay the payroll tax. I listed a few possibilities and wondered if there are any more. I dug around on-line and found a few more classes of people who are able to legally “opt out” of the payroll tax, including:

  • State and local government workers participating in alternative employer retirement systems
  • Election workers earning $1,200 or less a year
  • College students working at their academic institutions
  • Household workers earning less than $1,400 per year
  • Self-employed workers with annual net earnings below $400
  • Ministers

I’ve still got some questions. For one thing, what’s an “election worker?” Is that someone who works at a polling place, or someone who’s hired by a political campaign? Can someone earn $1,200 as an election worker, $1,400 doing “household work,” and $400 as a self-employed something or other — or are they mutually exclusive?

But even satisfactory answers to these questions won’t really address the problem. I had been hoping to earn enough money next year to satisfy my budget for the year, but not enough to put me in danger of owing federal income tax. Now I’m starting to think this is going to get more complicated as I’d like to avoid paying the payroll tax also. Since I doubt I’ll be able to rustle up a congregation eager to pay me a salary as their minister, I’m not terribly eager to work for the government, I’m not Amish, and I’ll need more than $3,000 to meet my annual spending needs… that puts me in a bit of a bind.

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