Most people have to pay federal income taxes. The amount that we have to pay is largely based on how much income we make in a year. Therefore, what constitutes “income” for tax purposes will have a great effect on our taxes. The Internal Revenue Service (IRS) offers guidelines to help you understand what’s taxable income. Here are some frequently asked questions about defining income for tax purposes.

Q: I receive alimony payments from my ex-husband. Do I have to count this money as “income” for tax purposes?

  • A:Yes, money given to you for your support from your ex-spouse is considered taxable income.

Q: I receive child support payments from my ex-wife to help pay for the costs of our children. Do I have to count this money as “income” for tax purposes?

  • A:No, you don’t have to include child support payments in your taxable income.

Q: I was the beneficiary under a family member’s life insurance policy. Do I have to report the proceeds as taxable income?

  • A:No, you usually don’t have to report life insurance proceeds as income on your tax return.

Q: I received a large monetary gift from my grandmother. Do I treat this money as income for tax purposes?

  • A:No, you generally don’t include gifts in your taxable income.

Q: Do I have to treat interest I earned from a monetary gift as taxable income?

  • A:Yes, any interest from a monetary gift must be treated as income, even if