By Raul Rodriguez Cota
25 Jul 2024, 17:41 PM EDT
The Internal Revenue Service (IRS) has outlined a range of income that will be tax-exempt in 2024.
Below, we share five types of income that taxpayers will not have to declare on their taxes.
1. Child support and some alimony payments
Child support payments are not considered taxable income, as long as they are part of a divorce settlement.
Regarding alimony, payments made under divorce decrees finalized after January 1, 2019 are not taxable to the recipient.
However, if the divorce was finalized before 2018, taxes may still be due on this income.
2. Credit Card Cash Back and Rewards
Benefits earned through credit card rewards programs, such as cash back, are not taxable.
This means that the points, miles and rewards earned can be used without worrying about additional taxes.
In 2024, inheritances will not be subject to federal taxes.
However, some states such as Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania still impose inheritance taxes.
4. Life insurance compensation
Proceeds received from life insurance will not be subject to tax, offering significant financial relief to beneficiaries in difficult times.
However, any interest earned from these compensations is taxable.
5. Qualified adoption expenses
Adoption expenses, such as attorney fees, court costs, and travel, may be eligible for a tax credit.
This means that families who adopt can get a tax break on these expenses and will not have to pay taxes on that money.
Keep reading:
– More than 10,000 people will receive money back for property taxes
– Child Tax Credit: Who can get up to $3,600
– Social Security: 125,000 checks begin arriving to New Jersey households