Taxable & Non-Taxable Income

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CUNY Borough of Manhattan Community College *

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330

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Accounting

Date

Nov 24, 2024

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pdf

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11/19/23, 7:44 PM Intuit Academy https://intuit.docebosaas.com/ia/learn/course/6799/play/22656/intuit-academy-tax-level-1-sources-of-income-oics6719;lp=518 1/4 Taxable & Non-Taxable Income What's taxable income? Money, property, or services that are received are all considered income. Certain types of income may be taxed. However, some may not be taxed. What is taxable income? It's income that is taxed or income in which personal exemptions and deductions are taken out, including: wages, salaries, tips, bonuses, vacation pay, severance pay, commissions interest and dividends certain types of disability payments unemployment compensation jury pay and election worker pay strike and lockout benefits bank "gifts" for opening or adding to accounts if more than the "nominal" value cancellation of debt (unless excludable by law or regulation) alimony recoveries of items deducted in the previous year selling of property, stocks, bonds, stock options, etc. pension and annuity distributions (amounts not contributed by the taxpayer with after-tax dollars) traditional IRA distributions (amounts deducted in prior years) rental income, farm income, business income royalties trust/estate income, Partnership/S-corporation income executor's commissions Social Security benefits (above the base amount)

11/19/23, 7:44 PM Intuit Academy https://intuit.docebosaas.com/ia/learn/course/6799/play/22656/intuit-academy-tax-level-1-sources-of-income-oics6719;lp=518 2/4 notary fees most court awards or damages fees or property received for services or barter income prizes, awards, gambling winnings, and illegal specific certain scholarships, fellowships, and grants What's not taxable income? Nontaxable income won't be taxed, whether or not the taxpayer enters it on their tax return. The following items are deemed nontaxable by the IRS: Inheritances, gifts, and bequests Cash rebates on items purchased from a retailer, manufacturer, or dealer Alimony payments (for divorce decrees finalized after 2018) Child support payments Most healthcare benefits Money reimbursed from qualifying adoptions Welfare payments Under certain circumstances, the following items may be nontaxable. Money the taxpayer receives from a life insurance policy when someone dies is not taxable. However, if the taxpayer cashes in a life insurance policy, then a portion, if not all of it, is likely taxable. Money from a qualified scholarship is not taxable. However, if the taxpayer uses the money for room and board or uses it to pay other personal expenses, that portion is normally taxable. Compensation Generally, taxpayers can receive income in three ways: money, services, and property. But, the taxpayer can also pay tax on income not yet in their possession. For example, if

11/19/23, 7:44 PM Intuit Academy https://intuit.docebosaas.com/ia/learn/course/6799/play/22656/intuit-academy-tax-level-1-sources-of-income-oics6719;lp=518 3/4 the taxpayer receives a check but doesn't cash it by the end of the tax year, it is still considered income for the year they received the check. The IRS requires taxpayers to declare all income on their returns. Income can include: Wages Salaries Commissions Strike pay Rental income Alimony (for divorce decrees finalized before 2019) Royalty payments Stock options, dividends, and interest Self-employment income Typically, unemployment compensation is also considered taxable income. However, for the 2020 tax year, up to $10,200 of unemployment benefits can be excluded from income. If the taxpayers are married, each spouse can exclude this amount. Amounts over this remain taxable, and if their modified adjusted gross income (AGI) is greater than $150,000, then they can't exclude any unemployment compensation. Income from fringe benefits If the taxpayer receives fringe benefits for services rendered, those benefits are usually considered taxable income, even if someone else receives them, such as the taxpayer's spouse. These taxable benefits and perks may include: A company-paid off-site gym membership A company vehicle for personal use Holiday gifts in the form of cash or gift certificates from their employer A certain portion of employer-paid dependent care Company-paid tuition fees over a certain amount

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11/19/23, 7:44 PM Intuit Academy https://intuit.docebosaas.com/ia/learn/course/6799/play/22656/intuit-academy-tax-level-1-sources-of-income-oics6719;lp=518 4/4 Company-paid financial counseling fees Employer-paid group life insurance over a certain amount Miscellaneous income Income that may not be readily identified as taxable but generally must be included on the taxpayer's tax return includes: Employer contributions to an unqualified retirement plan The fair market value of property received for the taxpayer's services Disability retirement payments from an employer-paid plan Sickness and injury payments from an employer-paid plan Property and services for which the taxpayer bartered Money and income from offshore accounts The remaining amount of a debt or loan that is canceled or forgiven

Related Questions

K Use the table to the right to calculate the federal income tax due for a taxable income of $158,000. The income tax due is $. (Type an integer or a decimal.) If your taxable income is Over- But not Over- $0 $9,275 $9,275 $37,650 $37,650 $91,150 $91,150 $190,150 $413,350 $190,150 $413,350 ******* The tax is Of the amount Over- 10% $927.50 +15% $5,183.75 +25% ********* $18,558.75+28% $46,278.75+33% $119,934.75+ 35% $0 $9,275 $37,650 $91,150 $190,150 $413,350 1 of

Need help

Use the Tax Rate Tables, Exhibit 18-3, to calculate the tax liability (in $) for the taxpayer. Name Filing Status Taxable Income Tax Liability Rua head of household $195,200

how to figure out net pay ?

Question 1: Which of the following appears on the W-3 Form but does not appear on the W-2 Form? Answer: A. O Federal income tax withheld В. O Kind of payer С. Social Security wages D. Dependent care benefits

Schedule Z-If your filing status is Head of household If your taxable income is: The tax is: of the But not amount over- Over- over- $0 $13,850 10% $0 13,850 52,850 $1,385.00 + 12% 13,850 52,850 84,200 6,065.00 + 22% 52,850 84,200 160,700 12,962.00 + 24% 84,200 160,700 204,100 31,322.00 + 32% 160,700 204,100 510,300 45,210.00 + 35% 204,100 510,300 152,380.00 + 37% 510,300 Write the equation of the 5th row in y=mx+b form

Question 3: Which of the following is taxable for Social Security tax? Answer: А. O Contributions to a 403(b) plan В. O Contributions to a flexible spending account С. O Contributions to a dependent care flexible spending account D. O Contributions to a cafeteria plan

Can you help me with this practice problem C.

Question 29 of 50. Taxpayers whose only unearned income consists of qualified dividends and capital gain distributions reported to them on Form 1099-DIV generally compute the amount of tax on their income using: 0000 11 Form 8949, Sales and Other Dispositions of Capital Assets. O The Qualified Dividends and Capital Gain Tax Worksheet. The Schedule D Tax Worksheet. The 2021 Tax Rate Schedules.

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Instructions: 1. Download BIR Forms 1701 Version 2018 at www.bir.gov.ph. 2. Compute the income tax payable, if any for taxable year 2021. YOU are engaged in the merchandising business and at the same time employed by PA-MINE Corp. as an Accountant for the TY 2021. In compliance with the existing rules in doing business, you applied for your TIN where your home BIR RDO (select the BIR which has jurisdiction over the place of your residence) assigned you Taxpayer Identification No. 123-456-789-0000. Additional information: You chose graduated tax rate You opted for itemized deduction Your financial records showed the following: Gross Sales – Php 4,000,000 Cost of Sales – Php 2,000,000 Expenses – Salaries and wages of staff – Php 360,000 Depreciation of car used in delivery – Php 100,000 Representation expense – Php 10,000 Office Rent expense – Php 360,000 Rent expense on your condominium – Php – 240,000 Utilities in office – Php 120,000 Electricity expenses in condominium – Php…