Is it taxable or nontaxable? Flashcards
1
Q
Alimony and Separate Maintenance payments?
A
prior to 2019 - taxable
2019 and after - non-taxable
2
Q
Aid to Families with dependent children (AFDC)
A
non-taxable
3
Q
Damages wrongful incarceration
A
non-taxable
4
Q
Unemployment compensation
A
taxable
5
Q
Civil damages
A
non-taxable
6
Q
Supplemental unemployment benefits
A
Taxable
Usually union unemployment benefits that supplement government unemployment
7
Q
Severance pay
A
taxable
8
Q
Rent
A
taxable
Rented for less than 15 days - non-taxable
9
Q
Recovery of Prior year deduction
A
Taxable - Taxes were itemized in a prior year and tax liability was reduced.
10
Q
Railroad Retirement Tier 1 benefits
A
A portion may be taxable (in place of Social Security for rail road employees)
11
Q
Railroad Retirement Tier 2 benefits
A
taxable
Additional retirement benefits associated with length of service with railroad
12
Q
Punitive or exemplary damages
A
Taxable - damages to teach a company a lesson for outrageous conduct
13
Q
Prizes (like the lottery)
A
taxable
14
Q
Employee awards and bonuses
A
taxable
15
Q
Notary fees
A
taxable
16
Q
Discounts
A
taxable
17
Q
Breach of Contract Payment
A
Taxable
18
Q
Back Pay
A
taxable
19
Q
Disability
A
Taxable - employer funded
not taxable - government funded
20
Q
Child Support
A
not taxable
21
Q
Gifts
A
Non-taxable to a point
22
Q
Interest on EE bond for education
A
non-taxable
23
Q
Payments to a beneficiary of a deceased employee
A
non-taxable
24
Q
Qualified Medical Waiver payment (payments made by the state for non-medical support)
A
non-taxable
25
Relocation payments
non-taxable
26
Rebates/Patronage dividends for a Co-op
non-taxable
27
Insurance proceeds
non-taxable
28
Rental Income
Less than 15 days - not taxable
| otherwise - taxable
29
Rental allowance clergymen
non-taxable
30
Reverse mortgages
non-taxable
31
Sickness and Injury payments
non-taxable
32
Temporary Assistance For Needy Families (TANF)
non-taxable
33
Supplemental Social Security
Non-taxable: Benefits for the blind and disabled
34
Veteran's Benefits
Non-taxable
35
Worker's Compensation
non-taxable
36
Payments in lieu of workman's compensation
non-taxable
37
Meals and lodging for convenience of employer
non-taxable
38
Distribution from an inherited IRA or Annuity
Taxable
39
Inherited IRA or Annuity
non-taxable
40
Interest on tax-free securities (muni bonds)
non-taxable
41
Inheritance
non-taxable
42
Dividends on Life Insurance
non-taxable
43
Damages for injury
non-taxable
44
Cancelled Debt
In general: taxable
| In relation to main home: my be non-taxable
45
Estate and trust income
taxable
46
Hobby Income
taxable
47
Military pension
taxable
48
Military Pay
A portion can be exempt from taxes. The rest would be taxes
49
Partnership, Estates and S-Corp Income (K1)
taxable
50
royalties
taxable
51
Income earned by a decedent but not received before death
taxable
52
Wages paid with virtual currency
taxable
53
Bartered goods and services
taxable at FMV
54
Prepaid income
taxable in year received
55
What is the formula for Gross Income?
Gross Income
- Adjustments/Deductions (above the line) Section 62)
----------------------------------------------------------------------------
Adjusted Gross Income (AGI)
- Greater of Standard or Itemized Deductions
- Qualified Business Income Deduction
--------------------------------------------------------
Taxable Income
* Tax Rate
----------------------------------------------------------
Gross Tax Liability
- Credits
-------------------------------------------------------------
Net tax liability or Refund Receivable
56
Compensation for services(fees, commissions, and fringe benefits)
taxable
57
self employment income
taxable
58
Gains from dealing in property
taxable
59
Military pay
Generally, taxable
| Active service in a combat zone - non taxable
60
Business income
taxable
61
clergy fees
taxable
62
dividends
taxable
63
embezzled funds
taxable
64
farm income
taxable
65
gains from illegal activity
taxable
66
gambling winnings
taxable
67
Group term life insurance premiums paid by employer for coverage >$50,000
taxable
68
Interest
taxable
69
Mileage allowance
taxable
70
Military pay (unless combat)
taxable
71
Partnership Income
taxable
72
Pension
taxable
73
Strike/Lockout benefits
taxable
74
Treasure
taxable
75
accident insurance proceeds
non-taxable
76
Annuity (cost basis element)
non-taxable
77
Damages personal physical injury/sickness
non-taxable
78
Gifts received
non-taxable
79
Group term life insurance premium paid by employer for coverage up to $50,000
non-taxable
80
Interest from local, county, city, state bonds
non-taxable
81
Life Insurance paid on death
non-taxable
82
Military allowance
non-taxable
83
Welfare payments
non-taxable
84
Income from illegal activities
taxable
85
Cancellation of Debt
taxable unless excluded
86
Employer provided unemployment benefits
taxable
87
Strike benefits from a union
taxable
88
Section 111 exclusion - Recovery of Benefit
non-taxable. An amount recovered this year for a tax benefit taken in a prior year that had no impact on GI in the prior year
89
Recovery of Tax Benefit
Taxable. Tax payer took a deduction in a prior year and then determined he is not longer entitled to the benefit.
In the current year, the TP will include in income the amount equal to the tax benefit.
90
Reimbursement for moving expenses
Taxable.
| Exception: qualified expenses for members of the military on active duty
91
Treasure Trove
taxable: once it is undisputed AND in the the possession of the TP
92
Disability payments as a result of a terrorist act against the United States
non-taxable
93
Life insurance proceeds to a beneficiary due to death of the insured
non-taxable
94
Employer paid death benefits paid to a beneficiary
taxable
95
Life Insurance proceeds because the owner cancelled the policy
```
Amount Received by owner
- premiums paid
-------------------------------------------
Gain/Loss
Gain: must be recognized - taxable
Loss: not recognized - not deductible
```
96
What amount of Life Insurance Premiums paid by the employer should be included in GI and taxed?
```
Total Life Insurance Premiums
- amount paid by the employee
- $50,000 allowed exclusion
_______________________________
Include in GI and tax
```
97
Union Strike Benefits
taxable
98
Disability payments from made from a pension
100% of payment is taxable until minimum retirement age is reached then follow typical pension/annuity rules
99
Reimbursement of Employee expenses
1. Reimbursement = expense: non-taxable
2. Reimbursement > expense and difference is returned to employer: not taxable
3. Reimbursement> expense and excess is not returned : taxable
4. No proof of expenses: 100% taxable
100
Insurance payments that reimburse expenses because TP has to live outside of their main home due to disaster/damage?
Excluded from GI
