Most income is taxable, unless specified by law. Here are some basic rules for filing your tax return:
Taxable income includes:
- All money you earn such as wages and tips,
- Bartering; the fair market value of property or services received is normally taxable,
- Life insurance policies redeemed for cash (taxed on the amount above the cost of the policy),
- Scholarship income used for room and board,
- Other income tax returns such as state or local refunds (reported on Form 1099-G).
Typically not taxable:
- Life insurance proceeds paid upon death,
- Qualified scholarships,
- Gifts and inheritances,
- Child support payments,
- Welfare benefits,
- Damage awards for physical injury or sickness,
- Dealer or manufacturer cash rebates,
- Reimbursements for qualified adoption expenses.
Always consult your tax advisor to ensure you are reporting income correct.