Types of Income the IRS Doesn't Tax

It may feel like the IRS taxes most of your hard-earned money, but some types of income are nontaxable.

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A frustrating thing about working hard to earn money is knowing the IRS will tax a portion of your earnings. Federal taxable income generally includes wages, tips, royalties, commissions, and for some, up to 85% of Social Security benefits. And that's not an exhaustive list.

However, several categories of income are not taxable in the eyes of the IRS. Generally, whether income is taxable depends on various rules, requirements, and regulations or whether you're talking about federal or state taxes.

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Kelley R. Taylor
Senior Tax Editor, Kiplinger.com

As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.