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Basically, anyone who earns more than about $12,000 (single)[i] during one year in the United States has to pay income tax whether he has an address or not. People can definitely earn enough money to owe income tax even though they cannot afford housing. Day laborers can certainly earn more than a few thousand dollars in a year. Trust funds can pay someone more than the minimum taxable amount in a year.
An interesting definition relevant to the beginning of the tax return might cause a homeless person to think that income tax returns do not apply to them. While in most encounters with the Internal Revenue Service, people are referred to as “taxpayers,” the income tax returns refer to the person responsible for the form as “head of household”– defined in the tax code as someone who “maintains as his home a household which constitutes for more than one-half of such taxable year the principal place of abode, maintaining the household during the taxable year is furnished by such individual.”[ii] This definition is only meant to distinguish between the tax liabilities of people paying for the household and the people who are dependent on the ones paying for the household, not to exempt people living without a household. There is no section of the tax code establishing that a household has to be a set location, certainly not one with an address.
The first equation taxpayers figure for their tax returns is the amount of gross income which the IRS defines as “all income from any source.”[iii] Gross income includes money in hand as well as interest on financial accounts, prizes, and possibly Social Security payments- depending on the taxpayer’s circumstances. Generally, Social Security payments are not taxed if they are the only source of income. But, if the taxpayer owes taxes from previous years, Social Security payments can be garnished to pay off that tax debt.[iv]
[i] Internal Revenue Service filing requirements as described in the IRS chart of Filing Requirements for most taxpayers. http://www.irs.gov/publications/p501/ar01.html#en_US_2010_publink1000220675
[ii] 26 CFR Subtitle A, Chapter 1, Subchapter A, Part 1, §2(b)(1)(a).
[iii] 26 CFR Subtitle A, Chapter 1, Subchapter B Part 1, §61(a).
[iv] For a general discussion of this, see Tax Topics – Topic 423 http://www.irs.gov/taxtopics/tc423.html. For full details see IRS Publication 915 regarding Social Security and Railroad Retirement Benefits http://www.irs.gov/publications/p915/index.html.