It’s always helpful to know which income the IRS doesn’t tax. This is true whether you’re filing taxes for the first time or you’re a seasoned professional looking to increase your personal tax savings.
These are the items you don’t have to pay taxes on in 2024. This means you could have a bigger refund next year and more chances for your refund to increase, he said. Finance Buzz.
Income not taxed in 2024
Child support and some alimony payments. Divorced couples do not have to pay taxes on child support payments or some alimony payments.
Credit Card Cash Back Rewards and RebatesRewards programs are more popular than ever, especially with offers from the best cash back credit cards. With these cards, you can earn anywhere from 1% cash back on purchases to 5% cash back when you shop at select merchants.
Inheritance. What you inherit will not be subject to taxes in 2024. There is no need to worry about dealing with complex tax forms or finding a qualified accountant to make sure your return is as accurate as possible.
The good news is that in 2024, all inheritances in the United States will be tax-exempt (except in 6 states: Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania).
Life Insurance PaymentsIn 2024, you won’t have to pay taxes on life insurance payouts. This means that if someone in your family was insured and you receive a payout after their death, you can rest easy knowing that the entire payout is yours.
Olympic and Paralympic Medals and Prize Money from the United States Olympic CommitteeU.S. Olympic and Paralympic medals and prize money from the United States Olympic Committee are tax-exempt. The same goes for any cash bonuses you earn from the United States Olympic Committee (USOC).
Qualified adoption expensesAdopting a child can cost anywhere from four to six figures, depending on the circumstances. The IRS offers a tax credit for qualified adoption expenses, but the rules are complex and adopting families should probably seek the help of a tax expert.
Qualified adoption expenses include attorney fees, court costs, and travel expenses associated with the adoption process.
Health care benefits
Health care benefits are also something you don’t have to pay taxes on. This is great news for those who receive health insurance through their employer or buy it themselves.
This benefit applies to both individual and group health insurance plans, as well as funded programs such as Medicare and Medicaid.
Cash back for retailersRetail cash backs are discounts offered when customers purchase goods and services from them. When customers buy something, they get a percentage back in the form of a cash back check, gift card, or other type of reward.
ScholarshipsScholarships are not taxable as long as they are used to cover qualified education expenses. You can rest easy knowing that any scholarship money you receive or donate will not be subject to taxes this year.
Gifts
Gift givers can rest easy knowing that their generosity won’t cost them or the recipient anything in taxes up to a certain amount.
But before you jump on the gift-giving spree, it’s important to remember that there are some limitations and restrictions imposed by the IRS regarding gifts.
For example, a parent can give a child up to $18,000 USD in tax year 2024 without incurring taxes.
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