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Income that cannot be taxed

The Internal Revenue Service (IRS) was established to collect the “allowable tax deductions” from the gross income of individuals and corporations. However, taxpayers should note there are some types of income the IRS cannot deduct taxes from. Below are the kinds of income that cannot be taxed by the IRS:

  • Compensation from illness or personal injury damage claims
  • Workers’ compensation benefits
  • Some veteran’s benefits
  • Child support payments
  • Insurance benefits used in medical expenses
  • Welfare payments
  • Life insurance proceeds
  • Public Safety Officers pension distribution
  • Gifts or inherited assets

The IRS is not allowed to deduct taxes from the aforementioned types of income because they are identified as “nontaxable income.” If you have a nontaxable income that is being taxed by the IRS, an attorney could work for you. Fill out the contact form on the top of this page today for your legal assistance.