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

Happy EITC Awareness Day!

One great reason to use The Benefit Bank to file taxes is that we help clients access credits that they may miss if they file on their own.  Even the IRS wants to make sure people know about a potentially large tax credit for our low income clients, called the Earned Income Tax Credit, or EITC. 

If you are on Twitter, make sure you follow OASHF for the latest EITC Awareness Day facts.  Or, you can visit Twitter and search "EITC" to see what other people are saying about it.

Here is the information about EITC Awareness Day I got from the IRS:

Workers Urged to Check Eligibly for EITC; IRS and Partners Mark 5th EITC Awareness Day

Videos: Earned Income Tax Credit: English
Podcast: Earned Income Tax Credit
 
WASHINGTON — The Internal Revenue Service and partners nationwide mark the 5th Earned Income Tax Credit Awareness Day on Friday, Jan. 28. This initiative highlights the availability of one of the federal government’s largest benefit programs for working families and individuals. 

The American Recovery and Reinvestment Act of 2009 created a new category of families with three or more children and increased the maximum benefit of EITC for tax years 2009 and 2010. The Tax Relief and Job Creation Act of 2010 extended these changes through 2012. 

The maximum credit for 2010 tax returns is $5,666 for workers with three or more qualifying children. However, workers without qualifying children may also be eligible for a smaller credit amount. 

"Millions of workers who did not earn high incomes claimed the EITC last year," said Doug Shulman, IRS commissioner. "The IRS encourages all eligible taxpayers to claim this valuable credit. Together with our partners, we can help taxpayers file their returns and get the EITC." 

Workers who earned $48,362 or less from wages, self-employment or farm income last year could receive larger refunds if they qualify for the EITC. Four out of five eligible taxpayers claimed the EITC last year obtaining an extra $2,200 from the credit on average. This represents a critical financial boost to over 26 million workers who earn low to moderate incomes.
Eligibility for the EITC is determined based on a number of factors including earnings, filing status and eligible children. Many people who experienced a change in these factors will qualify for the first time this year and may not be aware of the credit. 

Taxpayers must file a tax return, even if they do not have a filing requirement, and specifically claim the credit. Those who typically fail to claim the EITC include rural workers and their families; non-traditional families, such as grandparents or foster parents raising children; taxpayers without qualifying children; individuals with limited English proficiency; Native Americans; and taxpayers with disabilities. 

You earned it. Now file, claim it and get it
 
It is easy to verify eligibility for EITC by going to www.irs.gov and typing "EITC" into the search box. There is an online EITC Assistant, which can help taxpayers determine eligibility by answering a few simple questions.

More information and the details of eligibility rules are available at www.irs.gov/eitc.

Related Items:

• FS-2011-8, EITC Eligibility Rules for 2010 Tax Year Outlined

Ohio Benefit Bank in Schools - Outreach

Attention school staff and volunteers!  Want to help your students and their families connect to public benefits like food assistance or Medicaid, and tax credits like the EITC?  View the brief presentation below to get an idea of what the Benefit Bank is.

Interested?  Contact Sarah Olinger to discuss further how you can use this tool, or go ahead and register as an OBB site HERE.  See a recent press release on our efforts HERE.

To view this Prezi, click on the gray arrow at the bottom of the box and keep clicking to view each step.  You can also view it in another window by clicking the "OBB in Schools" link beneath the box.

OBB in Schools on Prezi

You can also view a more comprehensive and detailed look at the Ohio Benefit Bank via a webinar I created on YouTube here:

2010 Tax Guide Available

Tax Counselors, many of you have been wondering about the new 2010 Tax Guide. It is now available! To access the guide, simply log in to your counselor account on www.ohiobenefits.org then visit the training tab. Under the training tab you will see a Guides section. The OH 2010 Tax Guide is located there!
Thank you for all of your hard work!

New Site: Hard Hatted Women

Welcome to a new Central Ohio OBB site with state-wide reach!  They have a site here in Columbus, as well as a new site in Cleveland.  

The Hard Hatted Women are working here in Columbus out of the offices of one of their partners, the Institute on Women: http://instituteonwomen.org/ . 

Their website is located at http://www.hardhattedwomen.org. Their mission is "To empower women to achieve economic independence by creating workplace diversity in trade and technical careers."  They also include that "Because the vast majority of women we assist are unemployed or low income women in "dead end" jobs, a major result of our work is to assist women and their families to escape the cycle of poverty."  

 We salute your efforts and welcome you to the OBB network.