Publication 525: Taxable and Nontaxable Income

Publication 525, also known as "Taxable and Nontaxable Income," is your one-stop resource for understanding what income counts towards your tax liability. Published annually by the Internal Revenue Service (IRS), this comprehensive guide helps individuals and businesses accurately report their earnings and navigate the complexities of the tax code.

What You Will Find in Publication 525?

• Taxable Income: This section covers common income sources like wages, interest, dividends, and self-employment earnings. It also clarifies the tax treatment of fringe benefits, prizes, and awards.
• Nontaxable Income: This section explains income that's exempt from taxation, such as certain scholarships, gifts, and inheritances. It also outlines specific exclusions and deductions.
• Special Situations: Addresses unique income sources like royalties, pensions, and retirement distributions, providing guidance on their tax implications.
• Reporting and Recordkeeping: Offers tips on how to track your income and properly report it on your tax return.