Non Taxable Income – A Short List to Ease Your Tax Filing Worries
Report your income … Generally, any amount of money you receive during the year must be reported on your tax returns. This includes paychecks, interest on accounts and any type of withdrawal from accounts such as 401k or pension. However, there is a fairly important list of income sources that do not have to be declared as income on your tax return, and therefore are considered non-taxable.
Why is not this money taxed? In general, they are not taxed because they do not actually increase their personal income, nor can money be used for personal use so that the money remains non-taxable. . And, of course, the IRS has restrictions.
The following sources of income are considered non-taxable:
· Income from life insurance
· Inheritance: This has the stipulation that if you inherit the property and sell it , then you have to report the sale of the property as an income.
· Child support payments do not have to be reported as income by the recipient, but do not count as deductions for the payer.
· Scholarships, grants and any other type of financial aid for education; but it must be used for expenses related to school or school.
· Workers' Compensation payments, these can not be charged either if you owe a tax debt. In fact, any type of health benefits or accident is exempt from taxes.
· Benefits received from the Department of Veterans Affairs.
· Death benefits received by the family of a service member.
The tip of the iceberg … Of course, this is just a sample of nontaxable income sources, there are many more available at www.irs.gov .
Now you have the smoking gun … Use it!