Which items do you think are taxable and which are not? The answers are below.
1. Workers compensation
2. Educational assistance
3. Cancelled debt
4. Expense reimbursements
5. Fringe benefits
6. Bartering
7. Hosting a party and receiving payment (such as a candle party)
8. Life insurance proceeds
9. Unemployment benefits
10. Federal income tax refund
Taxable: cancelled debt, fringe benefits, bartering, hosting a party, and unemployment benefits
Non-taxable: Workers compensation, education assistance of $5,250, expense reimbursements, life insurance proceeds, and federal income tax refund
There are always exceptions and the rules are constantly changing. If you ever have a question about the taxability of an item, do not hesitate to contact our office.
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Newly employed individuals and those who have just started running their own business might need these facts. It's good that the scope of the non-taxable category is bigger than the taxable ones. That might be the main reason why everyone agrees with the taxation system today.
ReplyDeleteClemencia Summers