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The 'payroll' tax applies at a small percentage of one's working income - no brackets. As an employee, devote 6.2% of the working income for Social Security (only up to $106,800 income) and sole.45% of it for Medicare (no limit). Together they take one more 7.65% of your income. There's no tax threshold (or tax free) involving income in this system.

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Defenders within the IRS position would say it pops up to Section 61. The waitress provided a service for me, and I paid as it. Compensation for services is taxable. End of post.

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