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Senior Moments

Category: Financial / Topics: Financial Government Income Taxes


by Dan Seagren

Posted: February 25, 2018

Not everything is considered taxable income…

As long as I can remember, the IRS has found me. Once, the IRS told me that I had paid too much! 

When working, owning a home, I had more deductions than I do now that I'm retired. So, I settle for the Standard Deduction for our age, with marriage still intact.

But then, I read this: The Internal Revenue Service defines income as any money, property or services that taxpayers receive. All types of income are taxable unless specifically excluded by law.

OK. I know that. But it went on: There are a few exceptions, though, and they're – needless to say – worth knowing about. This article will describe a few of the more common categories of nontaxable income. I thought, that might make a good Senior Moment. So I read on. Deductions:

  1. Disability Insurance Payments
  2. Employer-Provided Insurance
  3. Gift Giving Up To $15,000
  4. Life Insurance Payouts
  5. Sale of Principal Residence
  6. Up to $6,000 of Income Offset by Capital Losses
  7. Income Earned in Seven States: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming
  8. Corporate Income Earned in Four States
  9. Inheritance
  10. Municipal Bond Interest

Now there were pages of stipulations which we won't go into here,but some of these I had already known and applied if eligible. Others didn't apply, and I am not anticipating an inheritance but you never know. A rich distant relative might do something but our parents are long gone.

This may or may not be helpful to any of you who read my columns but I thought it was worth a quick peek. Taxes are one of the essentials that societies need to function. For us, paying of taxes can increase or decrease depending on various factors. Fixed incomes remain fixed, but investments can rise or fall, raising taxes or lowering them. Ff held long enough and invested well, investments can be both costly tax-wise and beneficial to designated individuals, institutions or Uncle Sam.

Ah, yes. There are taxes and tax schemes, like flat and not so flat, and zero taxes when the bank runs dry. And yes, taxes can be avoided by a few felons, but that is not recommended. And for man,y if not most of us, we benefit in many ways if appreciative and honest. In any case, the options are few to avoid the IRS and other tax collectors. Right?

Dan Seagren is an active retiree whose writings reflect his life as a Pastor, author of several books, and service as a Chaplain in a Covenant Retirement Community.

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Posted: February 25, 2018   Accessed 234 times

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