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.
