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This module covers various miscellaneous income sources and their tax implications. It's important to report all sources of income accurately to ensure compliance with tax regulations.
Gambling winnings are fully taxable and must be reported on your federal income tax return. The threshold for reporting winnings may vary by type of gambling activity. Losses can be deducted, but only to the extent of reported winnings. Non-cash prizes, such as a car or vacation, are also taxable and should be valued at fair market value.
Key Tax Form: Form W-2G: Certain Gambling Winnings.
INSTRUCTIONS https://www.irs.gov/pub/irs-pdf/iw2g.pdf
Jury duty pay is considered taxable income at the federal level. Some states exempt jury duty pay from state income tax, while others do not. If you gave your jury duty pay to your employer, it's still taxable to you.
Key Tax Form: Form 1040: U.S. Individual Income Tax Return.
INSTRUCTIONS https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
Both cash and non-cash prizes are generally taxable. Non-cash prizes are taxed at their fair market value. Scholarships and certain educational prizes may have different tax treatment.
Key Tax Form: Form 1040: U.S. Individual Income Tax Return.
INSTRUCTIONS https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
Income earned from a hobby must be reported. If your hobby is intended to make a profit, you can deduct expenses related to that income. If the IRS considers your activity a hobby, you can't use losses to offset other income.
Key Tax Form: Form 1040: U.S. Individual Income Tax Return.
INSTRUCTIONS https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
If you itemized deductions in the previous year, part or all of your state tax refund may be taxable. State tax refunds are not taxable if you chose to take the standard deduction. Reportable refunds are generally reported on the federal return for the year you receive them.
Key Tax Form: Form 1040: U.S. Individual Income Tax Return.
INSTRUCTIONS https://www.irs.gov/pub/irs-pdf/i1040gi.pdf