Taxable? Exempt?

Most of the income that you receive is taxable and must be reported on your federal income tax return, but there are some instances when that income may not be taxable such as:

• Adoption expense reimbursements for qualifying expenses.

• Child support payments.

• Gifts, bequests and inheritances.

• Meals and lodging for the convenience of your employer.

• Compensatory damages awarded for physical injury or physical sickness.

• Welfare benefits.

• Cash rebates from a dealer or manufacturer.

In addition, some income may be taxable under certain circumstances, but not taxable in other situations. Examples of items that may or may not be included in your taxable income are:

• Life insurance if you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy.

All other items--including income such as wages, salaries, tips and unemployment compensation--are fully taxable and must be included in your income unless specifically excluded by law.

This Journalist holds an M.B.A. degree in Taxation and is Licensed to Practice before the I.R.S. For Church Seminars: (212) 560-7177.