Did you know that there are several categories of income are not taxable in the eyes of the IRS?

Here is a list of some common types of nontaxable income. Needles to say, it's good to consult a trusted tax professional or financial adviser if you are uncertain about your tax burden and how to minimize it. 

Here are Some Examples

Note: The following are examples of nontaxable income. (This list is not all-inclusive.) In some cases, you may have to report nontaxable income on your federal income tax return even though it isn't subject to tax.

For more information on what the IRS considers taxable, see IRS Publication 525.

The FBI has issued a warning to Americans that they should exercise caution when scanning QR codes with their smartphones because cybercriminals tamper with the codes to steal login and financial information.

A QR code—the square barcode that people can scan with their smartphone cameras—can provide quick and convenient access to a website or to a direct payment to an intended recipient.

Businesses have started using QR codes to provide contactless access to services, for instance, enabling access to restaurant menu items on a smartphone that can then be conveniently ordered.  But the more convenient technology tries to make life, the more ways that scammers can find ways to use it.

One of the most - I think - was the tax rule concerning those whose join the military was that your state of residence for tax purposes was where you signed up for the military.   So, if you joined the military from a state that has state income tax laws, you had to pay state taxes to to that state - even if you currently live in a state that had no tax.

Congress finally fixed it.

The Veterans Auto and Education Improvement Act of 2022 (VAEIA) was signed into law Jan. 5, 2023. The Act expands existing legislation protecting military service members’ and their spouses’ residency. 

Increased small employer plan start-up credit

Eligible small employers may claim a general business credit of up to $5,000 for the cost of establishing a pension plan, such as a SEP or SIMPLE plan, for eligible employees. An eligible employer is one with 100 or fewer employees who received at least $5,000 in compensation the previous year. The credit is allowed for the year the plan is established and each of the two subsequent years.

For plan years starting after Dec. 31, 2022:

The Internal Revenue Service announced the launch of a new page on IRS.gov explaining theEmployer-Provided Childcare Tax Credit, an incentive for businesses to provide child care services to their employees.

“This business tax credit helps employers provide their employees with child-care services and facilities,” said IRS Commissioner Danny Werfel. “We’ve heard that some employers may be overlooking this important credit, so the IRS has created a new one-stop shop for information on IRS.gov that provides an easy place to learn more.”

Taxpayers for whom using the technology required to comply with electronic filing requirements conflicts with their religious beliefs may claim a religious exemption and file paper forms instead. IRS Notice 2024-18 provides updated guidance on claiming the religious exemption for taxpayers filing business returns such as Form 1120, Form 1120-S, or Form 1065.

These filers are not subject to the e-filing waiver procedures applicable to other taxpayers, such as those requesting a hardship waiver. Instead, taxpayers who qualify for the religious exemption should print “Religious Exemption” in bold letters on top of the paper-filed return. They should notfile Form 8508, Application for Waiver from Electronic Filing of Information Returns. Notice 2024-18 obsoletes Notice 2010-13.

The Internal Revenue Service has announced work is underway on the Simple Notice Initiative, an effort to simplify and clarify about 170 million letters sent annually to taxpayers.  It's about time and those who have received one can certainly testify to that.

The Simple Notice Initiative will review and redesign hundreds of notices with an immediate focus on the most common notices that individual taxpayers receive. The redesign work will accelerate during the 2025 and 2026 filing seasons, improving common IRS letters going out to individual taxpayers and then expanding into notices going to businesses.

One of the biggest nightmares to straighten out is someone stealing your name and social security number and filing a fake tax return with that information.  It can take up to a year to straighten out the mess and your refund is held until it is done.  But, a very simple added precaution can stop those thieves dead in their tracks.  It is called an IP Pin.  If that pin number is not on your return, (you get a new one each January) then the IRS will not accept your return electronically.  Period.  So they can steal my name/SS# and try to file a return to get that free government money, but it will do them no good.