Non Taxable Income Sources
We all think that all the income we get from various sources is taxable but it is not true. There are some incomes that are not taxable and it is worth to know about them. Here is a list of incomes that are non-taxable.
1) Insurance provided by the employer: Almost all the employers provide health and accident insurance for their employees. The installments for this insurance is done by the employer and not added to your income so whatever amount you get from this insurance after your accident or health issues is a non-taxable amount. Along with this, the employer and employee contributions to health care services are also not taxable.
2) Cryptocurrency transactions: Everyone is aware that the cryptocurrencies are decentralized currencies that cannot be tracked by any of the banks or the governments. And for this reason, the cryptocurrencies are non-taxable incomes. There are many easy ways to do trading in cryptocurrencies like using Bitcoin Loophole, this trading software is known for achieving excellent investment results.
3) Gifts: Gifts of some types are also non-taxable. The prize is different than the gift, prize money and articles are generally taxable. While some gift articles are non-taxable for the receiver where only the person giving the gift pays the tax and some are completely tax-free. Parents can gift their children a certain amount that the non-taxable for both parents and children. The gift to charities are also non-taxable, rather this amount is reduced from the taxable income of the donor. This also includes medical expenses or tuition fees paid for someone else and the political donations.
4) Life Insurance Payouts: The insurance amount that you receive as an insurance benefit after your loved one’s death is also non-taxable most of the time, but there can be certain complexities in this type of insurance where you might have to pay the tax amount.
5) Income earned in certain states of US: All the states in the U.S have the authority to create their own laws. The seven states in the US that are Washington, South Dakota, Alaska, Nevada, Florida, Texas, and Wyoming have the law not to impose any state income tax on their residents. This is why many retired persons prefer to stay in this state as compared to others.
6) Capital Losses: The loss in your investments can also be used to lessen your taxable income up to an amount of $3,000 per year. You can use this loss amount every year till the entire loss amount it recovered.