Introduction You can receive income in the form of money, property, or services.
It includes discussions on employee wages and fringe benefits, and income from bartering, partnerships, S corporations, and royalties.
Check the index for the location of a specific subject.
Income that is taxable must be reported on your return and is subject to tax.
Income received by an agent for you is income you constructively received in the year the agent received it.
This publication discusses many kinds of income and explains whether they are taxable or nontaxable.
It also includes information on disability pensions, life insurance proceeds, and welfare and other public assistance benefits.
In most cases, an amount included in your income is taxable unless it is specifically exempted by law.
Income that is nontaxable may have to be shown on your tax return but is not taxable.
You are generally taxed on income that is available to you, regardless of whether it is actually in your possession.
For example, if the postal service tries to deliver a check to you on the last day of the tax year but you are not at home to receive it, you must include the amount in your income for that tax year.
If you agree by contract that a third party is to receive income for you, you must include the amount in your income when the third party receives it.
A valid check that you received or that was made available to you before the end of the tax year is considered income constructively received in that year, even if you do not cash the check or deposit it to your account until the next year.
If the check was mailed so that it could not possibly reach you until after the end of the tax year, and you otherwise could not get the funds before the end of the year, you include the amount in your income for the next tax year.