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Taxable and Non-Taxable Income - Keeping it Straight at Tax Time

Think You Know What's Taxable Income, and What's Not?

Last Updated: May 4, 2016

If you're not earning it in the traditional sense, income is tax-exempt, right? Wrong. As a general rule, consider all income taxable unless a specific exemption exists instructing you otherwise. The most common of these exemptions are listed below under non-taxable income. You'll also find a long list of what is taxable, including several examples that may surprise you.

Taxable Income

Ones that may surprise you:

Non-Taxable Income

Tips For Keeping Your Taxes Straight

  1. Keep records and a running list of all taxable and non-taxable income. Even if you don't have to pay taxes on it, some non-taxable income still needs to be reported on your tax returns. Keeping an updated list and organized files throughout the year will save you a ton of work and unnecessary stress come tax time.
  2. Set aside a percentage of your income for your taxes as the money comes in. If it's not earmarked accordingly, you'll inevitably spend it on something else. Think you'll make up for it with other income later in the year? It's certainly possible, but what will you be forced to sacrifice as a result?
  3. Consult with a tax professional. The information in this article is for general purposes only. Consult with a tax professional who can advise you on your unique tax situation for recommendations specific to you.
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