Some confusion exists about which income amounts received from various sources are taxable. While all income received worldwide is subject to tax, there are a few categories that allow you to avoid the big tax hand. You would normally include many of the common ones on your W 4 tax form you give it to your employer at the start of each year. Your employer uses this form to decide how much tax they would take off from your paycheck each period. Child support payments and welfare benefits are common nontaxable income items. So too are adoption expense reimbursements, workers’ compensation benefits, and cash rebates from a dealer or manufacturer. Having to declare many of these items would  prompt you to fill out the IRS form 1040ez instead of the basic 1040 form. The cash surrender value you receive from a life insurance policy may also be nontaxable, but you should get competent financial advice about these payments before including them on your income tax returns.

The article below will give you some important tips and ideas for preparing your income tax return.

Remember that while cash is king, taxable income may include other forms of payments. For example, if you decide to swap your product or service, including your labor, for another product, service or labor, you are in effect creating taxable income.
