There are certain categories of income that are exempt from income tax. Here are 12 that every taxpayer should know about.
- Disability Insurance Payments
- Employer-Provided Insurance
- Health Savings Accounts (HSAs)
- Life Insurance Payouts
- Earned Income in Seven States
- Corporate Income Earned in Six States
- Sale of a Principal Residence
- Financial Gifts
- Municipal Bond Interest
- Up to $3,000 of Income Offset by Capital Losses
- Roth Retirement Account Income
If you are interested in utilizing one or more of these income categories, be sure to read the Investopedia article for the rules and restrictions involved.