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.
Yes, money given to you for your support from your ex-spouse is considered taxable income.
No, you don't have to include child support payments in your taxable income.
No, you usually don't have to report life insurance proceeds as income on your tax return.
No, you generally don't include gifts in your taxable income.
Yes, any interest from a monetary gift must be treated as income, even if the gift itself isn't taxable.
You don't have to report the monetary amount for your disability if you pay for the entire insurance plan yourself. However, if your employer pays all or part of the insurance plan cost, you have to report as income the disability payments you receive that are due to the payments from your employer.
You usually don't have to pay taxes on a qualified scholarship if it's used for tuition or educational fees. Educational fees include supplies, books and required equipment. However, you must be a candidate at an educational institution for a degree.
No, since you have to pay back the borrowed money. You do have to report as income any part of the loan that's forgiven later since you wouldn't have to pay back that part of the loan.
Yes, money from an employment discrimination settlement is generally considered income for tax purposes.
You generally don't have to report money from a settlement for physical sickness or injuries. However, you have to report the money as income if you deducted medical expenses that were related to the injury.
Yes, tips that you receive at work are considered taxable income.
You have to report any gambling winnings on your tax return.
You have to report any taxable gain if you sell the property for more money than your basis in the property. Your basis is usually the fair market value of the property at the time the decedent died.