Taxable and Nontaxable Income | Business
Most types of income are taxable, but some are not. Income can include money, property or services that you receive. Here are some examples of income that are usually not taxable:
- Child support payments;
- Gifts, bequests and inheritances;
- Welfare benefits;
- Damage awards for physical injury or sickness;
- Cash rebates from a dealer or manufacturer for an item you buy; and
- Reimbursements for qualified adoption expenses.
Some income is not taxable except under certain conditions. Examples include:
- Life insurance proceeds paid to you because of an insured person’s death are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable.
- Income you get from a qualified scholarship is normally not taxable. Amounts you use for certain costs, such as tuition and required course books, are not taxable. However, amounts used for room and board are taxable.
All income, such as wages and tips, is taxable unless the law specifically excludes it. This includes non-cash income from bartering - the exchange of property or services. Both parties must include the fair market value of goods or services received as income on their tax return.
If you received a refund, credit or offset of state or local income taxes in 2012, you may be required to report this amount. If you did not receive a 2012 Form 1099-G, check with the government agency that made the payments to you. That agency may have made the form available only in an electronic format. You will need to get instructions from the agency to retrieve this document. Report any taxable refund you received even if you did not receive Form 1099-G.
For more information and examples, see Publication 525, Taxable and Nontaxable Income. The booklet is available at IRS.gov or by calling 800-TAX-FORM
This information is not intended to be a substitute for specific, individualized tax advice as individual situations will vary. Royal Alliance Associates, Inc., Georgetown Capital and its advisors are not engaged in rendering tax advice.
Prepared by the IRS. For more information go to www.irs.gov.
Registered Representatives may only discuss/and or transact securities business with residents of the following states: AL, AR, AZ, CA, CO, CT, DE, FL, GA, HI, IL, IN, KS, KY, LA, MA, MD, MI, MO, NC, NH, NJ, NV, NY, OH, OK, PA, SC, SD, TN, TX, VA, WA, WI
Representatives offer Securities and Advisory Services through Royal Alliance Associates, Inc., member FINRA/SIPC and a registered investment advisor.
Georgetown Capital Group is independent of Royal Alliance Associates, Inc. with separate ownership, and is not registered as a broker-dealer or investment advisor.
Joseph V. Curatolo, President of Georgetown Capital Group
5350 Main Street, Williamsville, NY 14221
Phone #(716) 633-9800 Toll Free 1 (800) 648-8091 Fax #(716) 633-9789