All income is taxable unless specifically excluded by law. Here are some basic rules you need to know to help you file an accurate tax return.
• Income subject to tax . The taxable income includes money you receive as wages and tips. You can also include income from bartering, exchange of goods or services. The fair market value of the property is taxable.
Some types of income are not taxable except under certain conditions, including:
• Life insurance . Revenue paid by cause of death of an insured person are generally exempt from taxation. However, if you charge a policy of life insurance for cash, for any amount that exceeds the cost of the policy is taxable.
• Qualified Scholarship . In most cases, income from such Scholarships are not taxable.This means that the amounts used for certain expenses such as books and tuition are required tax exempt. However, the amount you pay for room and board itself is taxable.
• Reimbursement of state tax . If you received a refund of state or local tax the amount may be taxable. You should have received a Form 1099-G, 2014 the agency that made the payment. If you did not receive the mail, the agency could haberselo sent electronically. Contact the agency to find out how to get the form. Report any taxable amount you received even if it received a 1099-G.
Here is a list of income that are typically not taxable:
- Gifts and inheritances
- Child Support Payments
- Benefits of Public Welfare (Welfare)
- compensation benefits from personal injury or illness
- Cash withdrawals from a dealer or manufacturer for an item you buy
- Refunds qualified adoption expenses
For more information on this topic, see Publication 525 income taxable and nontaxable.The IRS.gov/forms can be obtained at any time.
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