TaxHawk® Tax Tips
Do NOT overpay the IRS by including non-taxable income on your tax return.
The following are some of the main non-taxable items of income:
- Life insurance proceeds
- IRA and pension rollovers
- Child support payments
- Workers compensation
- Disability payments if you paid the premiums on the policy.
If your employer paid the policy, then the disability payments are taxable.
If you paid part of the policy, then part of the disability payments are non-taxable.
- Damages for personal physical injuries.
However, damages for emotional distress are taxable except for related medical expenses.
- Health and accident benefits
- Federal income tax refund.
Also your state income tax refund if you took the standard deduction on the previous year's 1040.
- Many scholarships and fellowships are not taxable.
- Foster care payments (certain restrictions for individuals over age 18 in foster care)
- Gain on the sale of your personal residence is usually nontaxable.
The gain might be taxable if you lived in the residence less than two years or if the residence has ever been used as a rental property or home office.
- Roth IRA qualified distributions
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