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Tax Tips : What is included in
income?
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What’s
included income?
Wages; Salary; fees; tips;
commissions; business profits; gain on
sale of real estate, securities and
other property; interest received;
rents collected; dividends; some state
tax refunds; royalties; alimony and
separate maintenance payments;
annuities and pensions, to the extent
the return exceeds investment; income
from an interest in an estate or
trust; prizes and awards; some fringe
benefits; up to 85% of Social Security
benefits; gambling winnings; strike
benefits; unemployment compensation;
sick pay; hobby income; barter income;
and illegal income.
What’s not included in income?
Gifts and inheritances; interest
from certain state and municipal
bonds; employer reimbursements for
business expenses (under an
accountable plan); returns of capital
(investment); gain up to $500,000 on
sale of principal residence (under
certain conditions); some or all of
Social Security Benefits; employer
paid health coverage for immediate
family; compensation for sickness or
injury; child support; welfare;
accident and health-insurance
proceeds; life-insurance proceeds
(estate tax may apply); veteran’s
benefits; scholarships and fellowships
to a degree candidate if used for
certain purposes; 14 days’ rental
income from house or vacation home;
interest on Education Savings Bonds;
child’s investment income up to
$800; federal income-tax refunds; and
some state income tax refunds.
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