What is excluded from gross income tax?
Exclusions from gross income tax are only those provided by statute including most proceeds from life insurance contracts, most damages received for physical personal injuries (as from a slip and fall or car accident), and gifts or inheritances. In order to understand all the available exclusions from gross income tax in your state, contact local income tax attorney.
State Laws and Gross Income Tax Exclusions
Most states that assess gross income taxes have different sets of rules, but commonly States do not assess gross income tax on gifts or inheritances, personal injury claims, or interest from State or Municipal Bonds. That is not to say these sources of gross income are not taxed at all. Gifts and inheritances may, for example, give rise to transfer taxes such as estate and gift taxes upon the transferor. The taxation of personal injury recoveries is quite complicated, and a tax attorney should be consulted before settling any such claim. Finally, some Government bonds may be subject to an alternative minimum tax, and persons having substantial gross income from municipal bonds should consult a tax accountant or attorney concerning the availability of the exclusion.
Getting Gross Income Tax Help
If you are unclear about exclusions from gross income tax laws in your state, contact a tax accountant or attorney in your area. You may also seek tax help from the IRS. Call 1-800-829-1040 to speak to a live IRS representative Monday-Friday from 7 a.m.-10 p.m. or visit the IRS website at IRS.gov.