Dividends The IRS Can’t Touch

As you probably know, most of your income is taxable. If you earn a salary, an hourly wage, tips, commissions, renting a property you entrust or dividends and interest on your investments, the IRS will ask you for his share of the profits.

Do you think you can avoid income taxes through bartering? Think again. Team revenues are also subject to taxes. Suppose you are selling your haircut services for grass cutting services. It sounds like a fair trade, right? According to the IRS, you must pay taxes on the fair market value of the cutting services you receive.

What happens if you decide to do something unpleasant and transfer funds from your boss or your reader's club? Believe it or not, this income is also taxable. Indeed, the IRS specifies explicitly that income from corruption and embezzlement is subject to income tax.

Is there a way for a taxpayer to earn income for a break? Many types of income are considered tax-free. Here are 17 types of income that the IRS cannot touch:

Veterans benefits

The benefits awarded to veterans and their families are not taxable. These include:

• Allowances for education, training, and residency.
• Compensation for invalidity and invalidity pensions.
• Life bags designed for wheelchair users.
• Motor Vehicle Grants for Veterans who lose their sight or limbs.
• Insurance income and dividends paid to veterans or their beneficiaries.
• Interest on insurance dividends reported to the Veterans Administration
• The benefits of an employee assistance program
• The number of deaths paid to a survivor of a member of the armed forces who died after September 10, 2001.
• Payments made as part of the payroll program
• Any bonus paid to a state or political subdivision for service in a combat zone

Child support

The money you receive for childcare is not taxable.

Welfare Benefits

The IRS does not tax welfare payments.

Workers' Compensation

In the instance of an accident at work or injury, these earnings are exempted from taxation, provided that the payments are made under the Workers' Compensation Act.

Foster Care Payments

If you are a parent who adopted kids and you receive child care benefits from a minor employment agency or a state or local authority, this income is not taxable.

Accident insurance

The payment of the accident insurance you receive is free unless the payments exceed the loss. 

Payments from the National Fund for Victims of Crime

If you receive funds from a public fund for victims of crime, it is also non-taxable income.

Inheritance

If by luck you happen to be fortunate enough to receive an inheritance from a deceased friend, a family member, or even a friend, you do not have to pay federal fees for it. This is because the deceased's property pays all taxes, if necessary, before receiving the estate. Some states levy taxes on state inheritances.

Disaster subsidies

Under the Emergency Relief and Disaster Relief Act, disaster assistance is used to cover expenses or needs for medical care, dental care, and funerals. These revenues are exempt from tax.

The benefits of black lung disease

Any federal payments of black lung benefits received by the Coal Mining Division (DCMWC) are considered non-taxable income.

Additional security revenue

This US government program provides monthly benefits to those 65 years of age with low, blind, or disabled income. The Social Security Administration administers the Additional Security Income Program (SSI), but the funds come from the general funds of the US Treasury, and not from the Social Security Fund. SSI payments are not taxable.

Interest in a particular state or local obligations

According to the IRS, interest on a guaranteed used to finance government operations is generally not taxable if the guarantee is issued by a state.

Compensation for injury or illness

Damages received due to physical injury, physical illness, or emotional distress due to injury or physical illness are generally tax-free.

Gifts

If you receive cash gifts from a family member or friend, you do not have to tax that income. If the donation exceeds $ 15,000 (2018 donation fee limit), the donor may pay a donation fee not you.

Combat Pay

The income you receive while parking in a combat zone is generally not taxable.

The bottom line

Although it seems like the IRS can get a share of every type of income you can earn, there are some exceptions to this rule. Before assuming income is taxable or not, contact a taxpayer or visit the IRS website.