Taxable income is the amount of your income that is subject to taxation. Common types of taxable income include salary, wages, tips, bonuses and employer-provided benefits. Some kinds of income may not be taxable, though, like employer-sponsored health insurance and child support payments. ...
Tax-exempt income includes child support payments, most alimony payments, compensatory damages for physical injury, veterans' benefits, welfare, workers' compensation, and Supplemental Security income. These sources of income are not included in your gross income because they're not taxable.4 Some ...
Knowing what to claim as taxable and nontaxable income can reduce your tax liability. Here's what you should know.
Taxable incomeincludes all types of compensation, whether they are in the form of cash or services, as well as property. Unless a particular income is expressly exempted by law from tax liability, every income is taxable and should be reported in the income tax return. Examples include: Salary...
Child support payments aren’t considered taxable income. Therefore, they usually aren’t included on your income tax return. However, there are some rare exceptions. Divorce or separation instruments executed on or before December 31, 2018, are taxable to the recipient. In other words, if you...
13 This also includes one-half of the self-employment tax that must be paid on this income.14 Other Above-the-Line Deductions Alimony: Payments that are not classified as child support and are made to a spouse pursuant to a divorce decree usually count as alimony. These payments are ...
If you receive alimony from your spouse or former spouse, you must report the alimony as income in the year that you received it if you received the alimony under a decree or court order made on or before December 31, 2018. Note that child support is not alimony and is nontaxable income...
Child support payments—Child support payments are tax-free to the recipient, and the payor can’t deduct the payments. Casualty insurance proceeds— If you’re reimbursed for a loss, like a car accident or house fire, you usually don’t have to report the income on your return. However,...
child support payments, welfare benefits, compensation for physical injury, cash discounts offered by the manufacturer of the product, reimbursement of expenditure incurred by adoption. If you received a reimbursement from local or state taxes, the money may be taxable. A third party agency may subm...
Earned Income Tax Credit (EITC) Child Tax Credit (CTC) Student loan interest deduction Taxable qualified retirement plan distributions Examples of situations not included in a simple Form 1040 return: Itemized deductions claimed on Schedule A, like charitable contributions, medical expenses, mortgage int...