Latest News, Local News, International News, US Politics, Economy

7 Non-taxable income streams to watch for in 2023!

In general, money earned from your job or business is completely taxable at the federal and, where relevant, state levels.

However, many types of investment income may be exempt from taxation, which can dramatically boost your earnings. Other non-wage payments you may get, such as insurance or other benefit payouts, may also be tax-free.

Bonds Issued By Municipalities

Municipal bonds are most likely the most frequent nontaxable investment. Municipal bonds pay interest that is not subject to federal taxation and is tax-free for citizens of the state issuing the bond.

This makes them more appealing to investors in the highest tax bands, as it increases their net yield.

Read more: Vaccine manufacturers are preparing bird flu shots for humans amid alarming surge in cases

Capital Gains In The Long Run

7-non-taxable-income-streams-to-watch-for-in-2023
In general, money earned from your job or business is completely taxable at the federal and, where relevant, state levels.

Long-term capital gains (those held for more than a year) are taxed at 15% for the vast majority of investors. This is a significant advantage over short-term capital gains rates, which are the same as your regular income tax rate and could reach 37% in 2023.

However, if you are single and have a taxable income of $40,400 or less, or married filing jointly and have a taxable income of $80,800 or less, your long-term capital gains tax rate is 0%.

Profits From Real Estate

If you benefit from the sale of your home, you have a capital gain, just like if you sold a winning stock. However, the tax code includes a generous provision that exempts earnings on the sale of a primary residence up to $250,000 for singles (or $500,000 for joint filers).

Retirement Benefits From Social Security

Social Security benefits are taxed for the vast majority of retirees. If you make less than $25,000 as a single filer or $32,000 as a joint filer, your Social Security benefits are tax-free.

Disability Benefits

Disability payments may be deemed taxable income in some instances. If you pay all of the premiums for a health or accident insurance plan, any disability benefits you receive are not taxable income.

Compensation For Employees

Payments made under a worker’s compensation coverage are generally deemed nontaxable. However, in some cases, your worker’s compensation may be considered taxable income.

In particular, if your worker’s compensation payments diminish your Social Security or railroad retirement benefits, a portion of your worker’s compensation payments may be taxable. 

Read more: Certain marijuana products in Arizona are being voluntarily recalled due to suspected contamination

Leave A Reply

Your email address will not be published.