Tracy’s Tax Tips #5: What is Taxable Income? What is Non-Taxable?

Although most income you receive is taxable and must be reported on your federal income tax return, believe it or not, there are some instances when income may not be taxable.

I’m Tracy Byrnes with the FOX Business Network, here with another of Tracy’s Tax Tips:

If you received child support payments, gifts, inheritances or adoption expense reimbursements for those qualifying expenses, you don’t owe a dime.  Same goes for Welfare benefits, cash rebates from a dealer or manufacturer and some workers’ compensation benefits.  Now, compensatory damages award for physical injury and meals and lodging for the convenience of your employer are also tax-free.

But things like life insurance proceeds, scholarships and fellowship grants, they have very specifc rules and can go either way, so be sure to check with your tax preparer or read Publication 525, “Taxable and Non-Taxable Income,” which you can find at www.irs.gov.

I’m Tracy Byrnes, FOX News Radio.