In the document IRS publication 525 the Internal Revenue Service has detailed the different types of incomes to consider as taxable and non-taxable by the taxpayers while filing their return. In this publication IRS outlines the methods in which employees can treat their income from different sources like retirement plans, fringe benefits or stock options for maximum tax benefit. It also covers methods for filing tax returns for certain special types of employees like clergies and military personals.
It will also help you in reporting your income from your partnership or real estate investment business along with the ways of treating sickness, disability and other benefits for the maximum tax deduction.
Since a taxpayer can have more than one source of income, in addition to his regular employment. Unless any one of them is particularly categorized as tax exempted, all of them will be considered as taxable income. Publication 525 discusses different types of taxable and nontaxable incomes and also includes discussion about fringe benefits and wages of the employees.
Types of Incomes Taxable Incomes:
Any amount that is included in your Annual Gross Income is considered as taxable income by the federal government. In this publication you can find a complete list of all taxable and nontaxable incomes in the country that you are required to mention in your report. Here are a few different types of incomes that are discussed in the document:
Incomes received constructively: Regardless of whether it is in your possession or not any of your available income is taxable. A check received during a financial year is always considered as constructively received income though it might be cashed or deposited in the next financial year. Income received by any agent of yours is also considered as income received constructively and you must also report this amount in your tax return.
This particular type of return, such as an amount paid for any future services is also included in the report of the year in which it has been received and not in the year when the service is actually delivered. Employee compensation is also required to be included in your Annual Gross Income along with wages, commissions or tips that you might receive from different sources.
Any pay that you receive for child care either in the home of the child or in your own home is to be mentioned in your annual tax return. The same rule is also applicable if you are babysitting children of your relatives or your neighbors either periodically or on a regular basis.
Any fringe benefit that you receive in connection with your employment or your performance is also considered as taxable income by Internal Revenue Service. Any kind of rent that you earn from your personal properties is also counted as your taxable income and is to be mentioned in your return.
Other than the incomes already mentioned partnership and corporation income, S-corporation return, bartering and royalties are also taxable and must be mentioned while filing.