Fastforward Review Flashcards
Employees who receive tips of less than $20 in a calendar month are not required to report these tips to their employer but must report them as income on their tax return.
Tips of $20 or more must be reported to employer on the 10th following the day received (must be business day).
Pay you receive from your employer while you are sick or injured is part of your salary or wages.
However, if you paid the premiums on an accident or health insurance policy, the benefits you receive under the policy aren’t taxable.
A taxpayer must include in income a portion of social security benefits received when provisional income exceeds a specified base amount.
Determine provisional income as follows:
One-half of Social Security benefits, plus
All other income, including tax-exempt interest.
A taxpayer cannot exclude income received from interest from qualified U.S. Savings bonds, employer-provided adoption benefits, foreign earned income or foreign housing or earned as a resident of American Samoa or Puerto Rico.
§86(b)(2); Publication 17
To determine the taxable amount of social security income, add one-half of SSA-1099 Box 5 to all other income ($2,990 + $28,990 = $31,980) and compare to the base amount ($25,000 for Single filers).
Worker’s compensation is not taxable to the recipient at the state or federal level.
