12 Days of TaxMas Tax Tips!

Day 3: What Is Taxable Income?

Welcome to Day 3 of our 12 Days of TaxMas Tax Tips! Today, our topic of discussion is all about understanding what exactly is Taxable Income. Knowing what income is taxable and what is not taxable income will help you understand what wages and income you need to notify your tax professional about. Plus, it helps you with tax planning.

What is a Taxable Income?

Taxable Income is Income or Money received that you, the taxpayer, could potentially be taxed on.

Types of Taxable Income

Wages, salaries, commissions, rental income, royalty payments, stock options, dividends and interest, and self-employment income, hobby income, gig income, freelance income, and gambling proceeds are all types of taxable income

Business Income...

If you operate a business, are a freelancer, or do work on the side as a hobby and receive over $400 in compensation, either from one source or multiple sources, for the same TYPE of work, then you must file that income on your tax return. (This goes for partnership also).

If you operate a business that is taxed as a Corporation or that carries the S Corp tax classification, then, regardless of the amount of money the business made, you will need to file a tax return for this business.

Non-Taxable Income

Social Security (sometimes), Worker's Compensation, Child support, life insurance proceeds, some canceled debts, gifts, and inheritance.

Get Expert Assistance

Navigating the complexities of the tax world can be overwhelming. At Xtreme Financial Group, our team of tax specialists is here to help. We can guide you through these complexities, identify all tax responsibilities, and ensure you and your taxes are fully taken care of with our Done For You Solutions.

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