When Taxes Might Not Apply

Sometimes, it can feel like you have to pay taxes on absolutely EVERYTHING. Fortunately, though, even though it may seem that way, there are actually some things you may not have to pay taxes on. So, if you’re feeling blue about all the taxes you have to pay, consider these great, non-taxable things.

Tax-Freebie #1: Money You Make from Selling Your Home

To begin with, in most cases, you won’t be taxed on any profits you garner from the sale of your home. Sounds pretty great, right? As long as you’ve used the home as your main personal residence for at least two years  and have owned it for at least a total of five years, you won’t be taxed on any profits you earn from selling your home…providing you don’t earn more than $250,000 or more than $500,000 if you’re married. Of course, some exceptions do apply, so before you forego paying taxes on the sale of your home, check with an accountant to make sure you qualify for this tax break!

Tax-Freebie #2: Gifts from Your Employer

Another nice way to get something without paying taxes is if you’re given a non-monetary gift or benefit from your employer. Nine times out of ten, you won’t be required to pay taxes on the gift. So, whether it’s a fruit basket, free insurance, a gym membership, free tickets to a show, or anything in between, you can just enjoy it tax-free. Of course, when in doubt, always check with your accountant, but you should be in the clear with this one!

Tax-Freebie #3: A Medical Settlement     

If you get hurt on the job or end up with a doctor who does something wrong, and it results in a medical settlement or a nice payment from worker’s comp, you won’t have to pay any taxes on the money. There are some exceptions, though. You, for example, MAY have to pay taxes if the settlement includes interest or income for punitive damages/lost wages.  Your lawyer and/or your accountant can let you know for sure what, if any, taxes are owed in these circumstances.

As you can see, sometimes you can enjoy something without paying taxes on it! And, since these freebies don’t come around that often, definitely take advantage of them when you can!