Not all “income” is taxable

There are several sources of revenue that are not subject to income tax.

Here are the most common sources of money that are not taxed on your federal income tax return:

*        Borrowed money such as from banks or personal loans.

*        Money received as a gift or inheritance from family or friends.

*        Money paid on your behalf directly to a school or medical facility.

*        Most life insurance proceeds.

*        Cash rebates from businesses when you buy an item.

*        Child support payments.

*        Money you receive for sustaining an injury.

*        Scholarships for tuition and books.

*        Disability insurance proceeds from a policy purchased with after-tax dollars.

*        Up to $500,000 of profit for a couple selling their personal residence.

*        Interest received on municipal bonds.

If you have included any of these on your income tax return for the past three years, you can amend your return for a tax refund.

If you would like assistance in determining what to include on your income tax return, please contact us. We are here to help you.

For more information, contact our office

Look for tax savings in miscellaneous deductions

Certain miscellaneous expenses you pay during the year may be tax-deductible. Examples include fees you pay for tax advice and employee expenses such as union dues, tools needed for your job, certain work clothes and uniforms, and work-related travel. If you itemize, these deductions could lower your tax bill. Most miscellaneous deductions can only be deducted if their total is more than two percent of your adjusted gross income. Other miscellaneous deductions are not subject to the two percent limit. Some examples: certain casualty and theft losses and gambling losses.

For more information, contact our office.