IRS wage garnishments are the most punitive form of garnishments that exist of any kind, anywhere. I was reviewing tax law and came across some information garnishment information from the IRS, and could not believe how little an individual gets to keep in the event they owe taxes to the federal government.
When a garnishment is properly filed and sent to an individual’s employer, an enormous chunk of each paycheck goes to the IRS (Publication 1494 provides an overview of the exemptions for each specific situation).
Let’s look at an illustration to underscore the point. Imagine you owe $10,000 to the IRS and earn $4,000 per month post-tax, paid biweekly, at the time that a garnishment is sent to your employer.
The IRS lets you keep a base of only $461.54 each time that you receive a paycheck. If you receive two paychecks that month, you are only getting $923.08 … Read the rest of this article!