Taxable or Non-Taxable Income?

More help from the IRS for our Ohio Benefit Bank tax sites!  We know most of our counselors are not tax experts, so here is a breakdown to help you visualize different types of income you may see, straight from the IRS.

 

Taxable or Non-Taxable Income? 

Generally, most income you receive is considered taxable but there are situations when certain types of income are partially taxed or not taxed at all.
To help taxpayers understand the differences between taxable and non-taxable income, the Internal Revenue Service offers these common examples of items not included as taxable income:

• Adoption Expense Reimbursements for qualifying expenses
• Child support payments
• Gifts, bequests and inheritances
• Workers' compensation benefits
• Meals and Lodging for the convenience of your employer
• Compensatory Damages awarded for physical injury or physical sickness
• Welfare Benefits
• Cash Rebates from a dealer or manufacturer

Some income may be taxable under certain circumstances, but not taxable in other situations. Examples of items that may or may not be included in your taxable income are:

• Life Insurance If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Life insurance proceeds, which were paid to you because of the insured person’s death, are not taxable unless the policy was turned over to you for a price.
• Scholarship or Fellowship Grant If you are a candidate for a degree, you can exclude amounts you receive as a qualified scholarship or fellowship. Amounts used for room and board do not qualify.
• Non-cash Income Taxable income may be in a form other than cash. One example of this is bartering, which is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included as income on Form 1040 of both parties.

All other items—including income such as wages, salaries, tips and unemployment compensation — are fully taxable and must be included in your income unless it is specifically excluded by law.
These examples are not all-inclusive. For more information, see Publication 525, Taxable and Nontaxable Income, which can be obtained at http://www.irs.gov or by calling the IRS at 800-TAX-FORM (800-829-3676).

Link:
Publication 525, Taxable and Nontaxable Income

Tax Season Updates (Email Copy)

Hello trusty tax counselors!  I hope you are getting our weekly Tax Season Updates from Cailey Ambrose (cambrose@oashf.org)  If not, you can read this week's update below.  If you would like to be put back on our mailing list please email Cailey so you can recieve important updates straight in your inbox. Tax Season Updates and Acknowledgements: Week Three

Week three dutiful tax season participants: here is the news! First, the tax manuals for 2010 are now available on the Training tab of your counselor portal. If your manual has Tax Guide 2009 on the cover, please recycle it and print out the new guide from the Training tab of your counselor portal! We would like to remind all tax counselors of some important rules about being an Ohio Benefit Bank counselor: 1.     Sites and counselors should never keep a clients' documents (completed return, W2s , social security cards, etc). 2.     Counselors may NOT share login names (Everyone using OBB to file returns or applications MUST attend the appropriate training).   3.     To ensure the highest quality of services, client complaints are investigated. 4.     Finally not complying with the rules above or in the OBB organization agreeement could result in removal as an OBB counselor.  Next Week Check for our Tax Counselor and Site Spotlights! That's all we have for you folks this week. Look for these updates next week and in the weeks to come for more important information about tax season!!

Thank you for all your hard work!! Cailey Ambrose and the Ohio Benefit Bank Team