Taxes: Gross Income - Other Inclusions Flashcards
Taxes:
Gross Income - Other Inclusions
Tips
Tips
- must be reported in TI
- reported to employer by 10th day of following month if greater than $20 per month
Taxes:
Gross Income - Other Inclusions
Alimony
Alimony - taxed to recipient - payor deducts Requirements - required by decree or written agreement - made in cash - paid to former spouse - terminate upon death - payor and payee cannot be members of same household Property Transfers to former spouse - not taxable event - get transferors basis
Taxes:
Gross Income - Other Inclusions
Alimony
Recapture
Special Rules
- if payments decline more than $15,000 (limit 1) after first 3 years of divorce
A. subtract (year 2 - year 3) - $15k (limit 1)
B. Reduce year 2 by A
C. add reduced year 2 to year 3 and divide by 2= limit 2
D. excess of year 3 over limit 2 - $15k
E. add A & D
Taxes:
Gross Income - Other Inclusions
Child Support
Child Support
- not taxable to recipient and not deductible by payor
Required Amount Not Received
- satisfy child support first
Taxes:
Gross Income - Other Inclusions
Damages
Damages
- physical injury or illness are not taxable
- worker’s compensation is not taxable
- if emotional distress, employment or age discrimination, or injury to reputation, must be included in gross income
- punitive damages: must be included in gross income
- include attorneys fees if recovery included in income
Taxes:
Gross Income - Other Inclusions
Annuities
Annuities
- basis is amount paid for insurance plan
- annuity funded through retirement plan, basis is only after-tax contributions
- no basis for tax-deductible contributions or employer contributions
Taxes: Gross Income - Other Inclusions Jury Duty Unemployment State Taxes
Jury Duty
- includible in income
Unemployment
- includible in income state & employer fund
State Taxes
- if they use the standard deduction, not taxable
