Income That is Not Taxed!
Posted on | February 22, 2010 | 1 Comment
Income That is Not Taxed!
While preparing your taxes this year you might notice that some forms of income are not taxed at all while other kinds of income are only partially taxed. You can save thousands of dollars in taxes each year by having non-taxable income compared to taxable income. The IRS has provided a list of incomes that are not taxed.
Included in the list of non-taxable income is adoption expense reimbursements, cash rebates for manufacturers, child support that you received, welfare, gifts, inheritance, compensatory damage awards, workers compensation, and meals and lodging reimbursed by your employer.
Examples of income that is partially taxed or taxed based on the circumstances are life insurance, college scholarships, college grants, and non-cash income. Non-cash items are taxable to the fair market value of the items exchanged in a barter situation. Sometimes income tax is avoided through the exchange of items instead of paying for services, but this is not a legal form of non-taxable income.
For more examples of income that is not taxable, take a look at IRS Publication 525 on the IRS website.
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Tags: child support > college grants > expense reimbursements > income > irs > irs publication 525 > life insurance > non-taxable income > taxable income > welfare > workers compenstaion
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