Generally, all sources of income are subject to income tax unless specifically excluded. Here are some sources of money that are not taxable:
* Money received as a loan.
* Gifts and inheritances.
* Child support received.
* Welfare benefits.
* Worker’s compensation (generally).
* Damages received for physical injury or sickness.
* Cash rebates from purchases.
* Meals and lodging for the convenience of the employer on employer’s premises.
Some sources of money that may or may not be taxable depending on the circumstances:
* Life insurance proceeds.
* Scholarship grants.
One source of income that is often overlooked is generated by bartering. If you trade goods or services for other goods or services with another person, both of you need to report the fair market value of the goods or services as income on your tax return. Also, like we discussed in our previous blog post forgiven debt can be taxable.
This list is by no means all inclusive. If you need additional information about taxable income please give our office a call.