Wednesday, April 8, 2020

Taxable Income Know How


Wages, bonuses, and tips are all considered taxable income, but the IRS has a broad definition of what income exactly means.

The IRS considers various payments and fees for services as taxable income, and it's best to become familiar with the list.   

§  
-Executor, trustee of estate administrator fees
§ Jury Duty wage
§  Board of Director fee
§  Security deposits from a tenant
§  Alimony you received for your ex-spouse after 2018
§  Award prizes and contest winnings
§  Freelance income
§  Severance Pay
§  Back pay
§  Strike Benefits
§  Freelance income
§  Interest and dividends

These are just a few of the items on a long list of taxable income.  There is also an equally long list of things where you don't' have to pay tax.

§  Accident or personal injury reward
§  Interest income from bonds issued in your state
§  Scholarships and grants
§  The money you receive as a gift.
§  Tax refund
§  The money you rolled from one retirement account to another.

Nontaxable income may not be as easy to identify as you might think and why it's essential to become educated and informed.  The tax laws are confusing and reason to enlist help in figuring it all out. You can look for more information on the IRS taxable and nontaxable income guides on www.irs.gov under Publication 525, or know that Lewis CPA accountants are here to answer all questions.

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