|| Income Defined
Earned income is an IRS term for income that is obtained by participating in a business or trade. Earned income typically includes...
- Wages, salaries, and bonuses
- Commissions and tips
- Self-employment income, including income from owning a farm, working as clergy for any religion, or as a statutory employee*
- Union strike benefits
- Long-term disability benefits received prior to minimum retirement age
* A statutory employee is technically an independent contractor, but has work conditions which permit him or her to be treated as an employee for certain tax purposes. Examples include life insurance agents, certain delivery people, and traveling salespeople.
Unearned income is an IRS term for income that is not obtained by participating in a business or trade. Unearned income typically includes...
- Interest and dividends
- Capital gains and capital gain distributions
- Retirement income (pensions, annuities, and IRA or 401k withdrawals)
- Social Security benefits (only a portion is taxable)
- Alimony and child support
- Some distributions from trusts
- Gifts and inheritances
- Forgiven debts
- Lottery and gambling innings
- Unemployment benefits
- Veteran's (VA) benefits
- Welfare benefits
- Property income