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taxmap/pubs/p554-002.htm#TXMP289bd48b Chapter 2 Taxable and   Nontaxable Income

Taxable and Nontaxable Income

Generally, income is taxable unless it is specifically exempt (not taxed) by law. Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds.

Under special provisions of the law, certain items are partially or fully exempt from tax. Provisions that are of special interest to older taxpayers are discussed in this chapter.

taxmap/pubs/p554-002.htm#TXMP414a9330 Compensation for Services

Compensation for Services

Generally, you must include in gross income everything you receive in payment for personal services. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options.

You need not receive the compensation in cash for it to be taxable. Payments you receive in the form of goods or services generally must be included in gross income at their fair market value.

taxmap/pubs/p554-002.htm#TXMP5d32893f Volunteer work.

Do not include in your gross income amounts you receive for supportive services or reimbursements for out-of-pocket expenses under any of the following volunteer programs.

• Retired Senior Volunteer Program (RSVP).
• Foster Grandparent Program.
• Senior Companion Program.
• Service Corps of Retired Executives (SCORE).

taxmap/pubs/p554-002.htm#TXMP6aaf5356 Unemployment compensation.

You must include in your income all unemployment compensation you receive.

taxmap/pubs/p554-002.htm#TXMP782c88a7 More information.

See Publication 525, Taxable and Nontaxable Income, for more detailed information on specific types of income.

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