subject: The IRS Cannot Touch These Types of Income [print this page] To avoid IRS issues as a wise taxpayer, you understand, you should not pay more or less of what you owe the IRS in taxes. What many taxpayers do not know is that in particular types of income that the government can no taxes on legitimate.
The IRS can not tax certain types of income as it is not by tax law. Understanding what the IRS can not tax you can keep your money, but you need to do everything right, to avoid taxProblems.
Tax-free interest is one of these forms of income. This is income from instruments such as state-issued bonds, or any other political entity is entitled to freedom from federal taxes. Municipal Bonds is the common name for this type of investment instruments, and the value of the tax benefit substantially increases if your marginal tax rate climbs. In essence, if your total income is rising, increasing the value of bonds in parallel.
Moneyfrom the collection of fees in a car-pool is a source of income that can not be taxed. The money that you charge your passengers in a car pool, contact your reported earnings will be excluded in case of problems with the IRS.
Another source of income that is excluded from tax sale of your home. If you sell your home, can choose from up to 250,000 dollars profit, $ 500,000, when a joint return with your spouse file. Every 2 years, you can claim this exclusion. If you sell your house for less than 2 yearsYou may also qualify for a partial exclusion. Of course you want a tax professional to ensure that this is the right way to do as they are a few limitations to ask.
Getting an increase is not only to an increased amount of a paycheck. Your employer may pick up the cost of higher health insurance plan or a better option instead if you prefer. You do not have to possible IRS problems, because the IRS is unable to raise your taxes
