Other Sources of Taxable Income You Might Have Overlooked
When it comes to paying taxes, most of us think of our traditional sources of income, like wages and salaries. However, there are many other sources of taxable income that you might have overlooked. In this article, we'll take a closer look at some of these sources and provide you with tips on how to include them in your tax return.
Interest Income
If you have a savings account or a CD with a bank, you'll earn interest on your deposits. This interest income is taxable and you'll need to report it on your tax return. You should receive a 1099-INT form from your bank that reports the interest you earned during the year. Be sure to include this amount in your tax return.
Dividend Income
If you invest in stocks, you might receive dividend income. Dividends are payments made by companies to their shareholders. Like interest income, dividend income is taxable and you'll need to report it on your tax return. You should receive a 1099-DIV form from your broker or financial institution that reports the dividends you received during the year. Be sure to include this amount in your tax return.
Rental Income
If you own rental property, you'll receive rental income from your tenants. This rental income is taxable and you'll need to report it on your tax return. You'll also be able to deduct expenses related to your rental property, like repairs, maintenance, and property taxes. Make sure you keep accurate records of all your rental income and expenses.
Self-Employment Income
If you're self-employed, you'll need to report all your income on your tax return. This includes income from your business, as well as income from any freelance work you've done. You'll also be able to deduct expenses related to your business, such as office rent, supplies, and equipment. Be sure to keep accurate records of all your income and expenses.
Social Security Benefits
If you're receiving Social Security retirement benefits, you may have to pay taxes on those benefits. Depending on your income, up to 85% of your Social Security benefits may be taxable. You'll receive a Form SSA-1099 from the Social Security Administration that will show you how much you received in benefits during the year.
Unemployment Compensation
If you received unemployment compensation during the year, that income is taxable and must be reported on your tax return. You should receive a Form 1099-G from your state's unemployment office that reports the amount of compensation you received.
Gambling Winnings
If you've won money gambling, that income is taxable and must be reported on your tax return. This includes winnings from casinos, lotteries, and horse racing. You'll receive a Form W-2G from the payer that reports the amount of your winnings and any taxes that were withheld.
Conclusion
As you can see, there are many sources of taxable income that you might have overlooked. To avoid any surprises come tax time, be sure to keep accurate records of all your income and expenses throughout the year. When in doubt, consult a tax professional who can help you navigate the complexities of the tax code.