Wage and Salary Income
Persons working as employees receive compensation in the form of wages, salary, and/or tips. Compensation for an employee's labor is taxed partly to the employee and partly to the employer. There are at least four federal taxes imposed on wage and salary income, plus any state and local taxes.
Self-employed persons incur three federal taxes on their earnings: federal income tax, Social Security tax, and Medicare tax. These taxes are imposed on net self-employed income, after various work-related expenses have been subtracted. State and city taxes, and various local business taxes may also apply.
Incentive Stock Options
Incentive stock options enjoy favorable tax treatment compared to other forms of employee compensation. Income from incentive stock options is taxable for federal income tax (including the alternative minimum tax), but are not taxable for Social Security and Medicare taxes. Upon meeting all the criteria for a qualifying sale, income from...
Community Property Income
Spouses living in community property states will need to follow state law to determine how much income to include on each spouse's separate federal tax return. There are some broad, general rules for determining community income (which must be split equally between the spouses) and for determining separate income (which is reported only by the...
IRS Community Property Rules for Gay Couples
The IRS has released new guidance on allocating the community property of gay couples who are married or registered domestic partners. These new community property rules affect how same sex couples in three states prepare their federal tax returns and could reduce federal taxes for some gay couples.
Tax Treatement of Credit Card Rewards and Frequent Flyer Miles
Rewards and discounts issued by credit card companies and frequent flyer miles are not considered taxable income. However such rewards and discounts can reduce the cost of a tax-deductible expense.
Canceled Mortgage Debt and Taxes
Normally, debt that is forgiven or canceled by a lender is considered taxable income to the debtor. But there are exceptions in the case of mortgages under the Mortgage Forgiveness Debt Relief Act. Learn more about the exclusions for mortgage debt.
Canceled Debt & Mortgage Forgiveness
Anytime a lender cancels, or forgives, your debt, that is considered income to the debtor. Canceled debt on a main home may be tax-free, providing welcome tax relief to people who have lost their homes through foreclosure.
Wages: How to Report Your Wages from Form W-2
Wages and salaries are reported on Form 1040 Line 7. Find out how to read your Form W-2 Wage and Tax Statement, and what to do if you don't receive a W-2 from your employer.
Interest Income: Reporting Interest and Tax-Exempt Interest
Interest income from banks, money market funds, and tax-exempt bonds are reported on your tax return. Find out how to report your interest income on Form 1040 Line 8.
Dividend Income: Reporting Dividends and Qualified Dividends
Dividends from stocks and mutual funds are reported on your tax return. Find out when you need to fill out Schedule B, and what amounts go on Form 1040 Line 9a and 9b.
Taxable Refunds: Figuring the Taxable Portion of State Tax Refunds
Learn how to report last year's state tax refund on this year's tax return. Instructions for Form 1040 Line 10.
Alimony and Taxes: How to Report Alimony Received
Alimony is income to the person receiving alimony, and is taxable as ordinary income.
Business Income: Reporting Business Income or Loss on Form 1040
Report business income from self-employment on Form 1040 Line 12. Tips for reporting your net profit or loss from self-employment on Schedule C.
Ordinary Gains / Losses
How to report ordinary gains on Form 1040 line 14. Figuring and reporting your ordinary gains and ordinary losses from the sale of business assets.
How to report IRA distributions on Form 1040 Line 15. Tips for figuring and reporting non-taxable and taxable Individual Retirement Account distributions, withdrawals, and rollovers.
IRA Withdrawals (Form 1040 Line 15)
How to report IRA withdrawals on Form 1040 Line 15. Tips for figuring and reporting non-taxable and taxable Individual Retirement Account withdrawals, distributions, and rollovers.
Pensions and Annuities: Reporting the Taxable Portion
Reporting the taxable portion of pension and annuity income can get a little tricky. Covers when to use the Simplied Method, and when you must use the General Rule. Links to essential tax information on pension and annuity income from the IRS.
Rental Income and Loss: Form 1040 Schedule E
The key to mastering the Schedule E is to organize your income and expenses using a spreadsheet or personal finance software program. In my experience, clients who keep detailed summaries of their rental property expenses are the ones who benefit most at tax time from the generous tax rules regarding rental income.
S-Corporation Profits: Reporting 1120S Schedule K-1 Income
Shareholders receiving a Schedule K-1 must report the amounts on IRS Form 1040 Schedule E, page 2. Generally speaking, ordinary net business income or loss is reported on Schedule E. Other income items are reported in the appropriate part of the 1040 tax return.
Partnership Income: Reporting 1065 Schedule K-1 Income
Partners receiving a Schedule K-1 must report the amounts on IRS Form 1040 Schedule E, page 2. Generally speaking, ordinary net business income or loss is reported on Schedule E. Other income items are reported in the appropriate part of the 1040 tax return.
Farm Income: Report Farming Income on Schedule F
Farmers report their net profit or loss from farming on IRS Form 1040 Schedule F. This form reports income and expenses for self-employed farmers. Tax tips for farmers, plus links to essential IRS resources.
Report unemployment compensation as taxable income on Form 1040, 1040A, or 1040EZ. Tips for where to report the unemployment, and how unemployment compensation is treated under the tax law.
Social Security: Taxable Portion of Social Security Benefits
Social Security benefits are taxed depending on your total income from all sources. Here's how to calculate how much of your Social Security benefits is taxable.
Foreign Income: Reporting Foreign Earned Income and Wages
Americans working abroad can exclude up to $80,000 per year from their US taxable income. Find out about the foreign earned income exclusion (IRS Form 2555), along with helpful tips for preparing an expatriate tax return.
Income from gambling is subject to the federal income tax and reported as Other Income on Line 21 of the Form 1040. The cost of losing bets can potentially be deducted as gambling losses. Casinos are required to report gambling winnings and to withhold federal income tax under certain circumstances.
Other Income: Prizes, Awards, Gambling Winnings, Jury Duty
How to fill out your Form 1040 line 21, other income. Reporting various income items such as prizes, awards, gambling winnings, jury duty fees, and other income.
A capital gains is a type of income derived from buying and selling capital assets. The difference between what you paid for an investment and what you received when you sold that investment is a capital gain or loss.