Wednesday, February 29, 2012

Examples of Non-Taxable Income

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   The Internal Revenue Service gets a share of the majority of your income before you even see the check in most cases. We have come to accept this inevitability for the privilege of living in the good old United States of America, and Uncle Sam wants you to pay rent! There are a few exceptions in the form of non-taxable income that you actually don't have to pay taxes on, which is a relief in itself! Below are a few examples of non-taxable income that you can take advantage of this tax season.

Education Expenses 
Your company can pay, and deduct, up to $5,250 per year in supplemental educational assistance for either undergraduate or graduate-level courses. This tax-free course doesn't have to be related specifically to your job, but courses that involve hobbies, games or sports activities aren't applicable. 
Profit From Selling Your Home
Since 1997, if your home was your primary residence for at least two recent years, you can exclude up to $250,000 or $500,000 if you're filing jointly when you sell said property.
This money doesn't have to be reinvested, and the exclusion can be claimed every two years if you sell your main property again. For those that don't make the two-year time constraint, you can get a partial exclusion based on time and residency.
This partial exclusion carries one other stipulation: the sale must be required because of a change in employment or some outside circumstance. The IRS is surprisingly flexible with said circumstances, such as a growing family or a hostile next door neighbor.

But wait, there's more:
  • Cash rebates (for example, you receive $500 after purchasing a new car)
  • Casualty insurance and other reimbursements for theft or casualty loss
  • Gifts, bequests, and inheritances
  • Military allowances
  • Supplemental Security Income (SSI) payments
  • Veterans' benefits
  • Welfare benefits
  • Disaster relief grants
  • Mortgage assistance programs
 We hope you get to take advantage of some of these benefits and you get a great refund this tax season!

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