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Non-Taxable Income
From the editors at WIFE |
Surprise! Not all income is taxable.
Though incredible to believe, it’s really true. Let’s hope Congress doesn’t
get hold of these and make them taxable in the future.
Non-taxable interest income
Interest on municipal bonds issued in your state isn’t taxable by either the federal
or state governments. U.S. government bond interest, such as on savings bonds or treasury
bills, aren’t taxable by your state, though you must include it on your federal
income tax return.
Gifts and inheritances
Money you receive as a present or an inheritance isn’t taxable income to you and
should not be included on your income tax return. All inheritance taxes have been paid by
the estate before the money came to you.
Earnings on retirement plans
As long as money is invested within a retirement plan, the earnings aren’t taxable to
you. Of course, you will pay tax on withdrawals when you finally tap the money (except for
Roth IRAs, which are generally tax exempt).
Life insurance proceeds
If you are the named beneficiary on a life insurance policy of someone who died, the
payments will not be taxable to you, except for any interest included in the payment.
Other non-taxable income includes divorce property settlements, scholarships and
fellowship grants for degree candidates, child support payments, and accident and personal
injury awards.
The Women's Institute for Financial Education
(WIFE) is a non-profit organization which provides financial education, networking
opportunities, seminars, and workshops for women of all ages. |
