The IRS has the authority to tax all income from whatever source is derived. This includes compensation for services, gains from dispositions of property, interest and dividends, rent and royalties, pensions and annuities, gambling winnings, and even illegal activities. All such income a person receives is collectively referred to as “worldwide income.” However, not all money or property is taxable or subject to tax. This course discusses the different types of taxable and nontaxable income and shows you where and how to report such wages on a professionally prepared tax return. A tax professional must recognize the different kinds of taxable income, tax-exempt income, and other income included in Schedule 1, line 8, and must know how to figure out the taxable percentage on social security benefits.
This course will discuss the Income line on Form 1040. Students will understand where to report each item, the forms associated with each item, and what must be attached to the taxpayer’s tax return. The student should be able to recognize the type of income that must be included as Other Income, as well as how to figure the taxable percentage on social security benefits.