Taxable Income & Nontaxable Income
You can reduce your tax liability by knowing what to claim as taxable and nontaxable income. Consider income to be all money that increases your wealth – wages, salary, interest, tips, commissions etc.
There is very little that is nontaxable, and anything that is will be specifically listed by the government, with the circumstances as to why it is non-taxed income.
The IRS requires that you declare all income on your tax return – all taxable income includes:
Compensation
- Wages
- Salaries
- Commissions
- Unemployment compensation
- Strike pay
- Rental income
- Alimony
- Tips and gratuities
- Royalty payments
- Stock options, dividends, and interest
- Self-employment income
Income From Fringe Benefits
- Off-site gym memberships that are paid by your employer
- Company vehicles
- Gift certificates or cash, if given as a gift by your employer
- Company-paid tuition fees
- Company-paid financial counseling fees
- Employer-paid group life insurance
- Social Security Benefits
Misc. Income
- Income from bartering arrangements
- Injury and sickness payments (from an employer-paid plan)
- Disability retirement payments (from an employer-paid plan)
- Canceled or forgiven debt
- expense reimbursements
Income sources that are not taxable are:
- Inheritances, gifts
- Cash rebates (items purchased from a retailer, manufacturer, dealer, etc.)
- Non-taxable alimony payments
- Child support
- Most healthcare benefits
- Veterans benefits
- Welfare payments
