In tax law, income is broadly defined as any money, property, or services that a taxpayer receives. This includes wages, salaries, tips, commissions, bonuses, rental income, interest income, dividends, capital gains, and business income. In addition, income can also include non-monetary compensation, such as a gift or an award.
However, certain types of income may not be taxable, such as certain qualified scholarships and fellowship grants, some Social Security benefits, and some employer-provided benefits, like health insurance.
It is important to note that income can also be subject to deductions and exemptions, which can lower the amount of taxable income. For example, taxpayers may be able to deduct certain business expenses, certain educational expenses, and contributions to retirement accounts.
If you are uncertain about whether a specific type of income is taxable or subject to deductions and exemptions, it may be beneficial to consult with a tax professional or an attorney who is familiar with tax law in your jurisdiction. They can provide you with specific advice based on your individual circumstances and help you identify potential tax planning opportunities.
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