Is this Income Taxable?
While most income you
receive is generally considered taxable, there are some situations
when certain types of income are partially taxed or not taxed
at all.
To ensure taxpayers
are familiar with the difference between taxable and non-taxable
income, the Internal Revenue Service offers these common examples
of items that are not included in your income:
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Adoption
Expense Reimbursements for qualifying expenses |
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Child
support payments |
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Gifts,
bequests and inheritances |
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Workers'
compensation benefits |
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Meals
and Lodging for the convenience of your employer |
 |
Compensatory
Damages awarded for physical injury or physical sickness |
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Welfare
Benefits |
 |
Cash
Rebates from a dealer or manufacturer |
Some income may be
taxable under certain circumstances, but not taxable in other
situations. Examples of items that may or may not be included
in your income are:
 |
Life
Insurance If you surrender a life insurance policy
for cash, you must include in income any proceeds that are
more than the cost of the life insurance policy. Life insurance
proceeds, which were paid to you because of the insured person’s
death, are not taxable unless the policy was turned over to
you for a price. |
 |
Scholarship
or Fellowship Grant If you are a candidate for a
degree, you can exclude amounts you receive as a qualified
scholarship or fellowship. Amounts used for room and board
do not qualify. |
 |
Non-cash
Income Taxable income may be in a form other than
cash. One example of this is bartering, which is an exchange
of property or services. The fair market value of goods and
services exchanged is fully taxable and must be included as
income on Form 1040 of both parties. |
All other items—including
income such as wages, salaries and tips—must be included
in your income unless it is specifically excluded by law.
For
more information and answers to your questions about taxable income,
give one of our tax specialist a call at 713-611-1040. Let us
put our 30
years of tax planning and tax strategies to work for your TODAY!
Call
us today at 713-661-1040 and let us put our experience to work
for you. Protecting your bottom line is our top priority!
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