When it comes to taxable income, the Internal Revenue Service cannot consider many things as non-taxable. Trading your services will not help as well. This is because the value of non-cash items has to be established and then calculated as income. Also, you are not permitted to keep your money in a foreign bank (so as to earn interest secretly). You also cannot escape with covert ways to make that extra cash. Uncle Sam does not care about what channel you are using to make your extra money, as long as he gets his cut.
There are, however, a few sources of income that the IRS does not consider taxable. This includes disaster relief grants, child support payments, welfare benefits, emotional distress damages, foster care payments, worker's compensation, black lung disease benefits, casualty insurance, and various other compensations. Property inheritance is not taxable. However, you will still owe the Internal Revenue Service on any income the inheritance generates.
It is never really clear what income is considered taxable or non-taxable. For instance, the current tax laws perceive different situations concerning payments of life insurance in various ways. If you give up your life insurance policy for money, you will be required to include any proceeds that are more than the amount on the policy as taxable income.
However, life insurance that has been paid to you as the recipient of the individual who has been insured is not considered taxable (unless the insurance policy was given to you at a certain particular price).
Another situation whereby income may not be viewed as taxable is in the case of scholarships or fellowships funding money. If you are studying towards a degree, you are able to leave out amounts of money that you received as a scholarship or fellowship and spend it on tuition, approved books, fees, or any other equipment required for educational purposes. On the other hand, any allowance used for room and accommodation is considered taxable.
Also, there are some special rules of taxable income for particular professions. These include volunteers who might be given small amounts of money for the services they provide as well as the clergy or people who work for employers who are overseas.
These instances are not completely detailed. You may have to pay the taxes on some kinds of income or you may be exempted from doing so. Therefore, if you are experiencing any peculiar income issues, do not hesitate to contact the Internal Revenue Service or your tax professional for more advice on the matter. You can also do some research online to find a detailed list of what the IRS views as taxable.
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