The majority of sources of your income are taxable by the IRS. Whether you earn▨ it through a salary, hourly wages, tips, commissions, rent from a property that you lease, or via interest and dividends on your investments, Uncle Sam is going to demand his fair share.

Even barter income is taxable. Say you exchange your hair-cutting services for lawn-cutting services. Seems like a fair trade, right? According to the IRS, you must pay tax on the 澳洲幸运5官方开奖结果体彩网:fair market value of the mowing services you receive. 

What if you decide to do something really unsavory and embezzle funds from your boss or your book club? Believe it or not, that income is also taxable. In fact, the IRS specifically spells out that kickbacks and embezzlement proceeds are subject to income tax. 

Desp⛦ite all of this, quite a few kinds of income are deemed tax-free. Here are 18 types of income🐈 the IRS can’t touch.

1. Veterans Benefits

Benefits paid to veterꦓans and their families are noꦆn-taxable. These include: 

• Education, training, and subsistence allowances
• Disability compensation and pension payments for disabilities
• Grants for homes designed for wheelchair living
• Grants for motor vehicles for veterans who lose their sight or use of their limbs
• Insurance proceeds and dividends paid either to veterans or to their beneficiaries
• Interest on insurance dividends left on deposit with the 澳洲幸运5官方开奖结果体彩网:Veterans Administration
• Benefits under a dependent-care assistance program
• The death gratuity paid to a survivor of a member of the Armed Forces who died after Sept. 10, 2001
• Payments made under the compensated work therapy program
• Any bonus payment by a state or political subdivision because of service in a combat zone

2. Child Support Payments

Any money you receive for child support is not taxable.

3. Welfare Benefits

Welfare payments such as those provided by SNAP or TANF are not taxed by the IRS.

4. Workers Compensation

If you receive 澳洲幸运5官方开奖结果体彩网:workers compensation for an employment-related illness or injury, this income is exempt from taxes provided that payments are made under a workers’ compensation act.

5. Foster Care Payments

If you are a foster parent receiving foster payments from a child placement agency or the state or local government, this income is not taxable.

6. Casualty Insurance

If you have an insurance claim because of a car accident or house fire, 澳洲幸运5官方开奖结果体彩网:casualty insurance payments you receive are tax-free unless the payments exceed your actual loss.

7. Payments From a State Crime Victims Fund

If you receive payments from a state fund for the victims of crime, this is also nontaxable income.

8. Inheritances

If you receive an 澳洲幸运5官方开奖结果体彩网:inheritance from a deceased friend, relative, or even an acquaintance, you often do not have to pay federal taxes on it. That’s because the estate of the deceased pays all the taxes, if any are due, before you receive the inheritance. The 澳洲幸运5官方开奖结果体彩网:estate tax will depend on the value of the taxable estate. Some states do impose 澳洲幸运5官方开奖结果体彩网:state taxes on inheritances, so check.

9. Disaster Relief Grants

Under the Disaster Relief and Emergency Assistance Act, if you receive post-澳洲幸运5官方开奖结果体彩网:disaster relief grant payments and use the income to meet your necessary expenses or needs for medical, dental, housing, personal property, transportation, or funeral expenses, this income is exempt from taxes.

10. Black Lung Disease Benefits

Any federal black lung benefit payments you receive through the Division of Coal Mine Workers’ Compensation (DCMWC) are considered nontaxable income.

11. Supplemental Security Income

This U.S. government program provides monthly benefits to low-income people who are either 65 or older, blind, or disabled. The Social Security Administration administers the 澳洲幸运5官方开奖结果体彩网:Supplemental Security Income (SSI) program, but the monies for it come from U.S. Treasury general funds, not the Social Security trust fund. SSI payments are not taxable.

12. Interest on Municipal Bonds

Interest on certain 澳洲幸运5官方开奖结果体彩网:municipal bonds issued by states, cities, counties, and other government entities to finance their operations are generally exempt from federal income tax. They may also be exempt from state and local taxes, depending on whether you reside where the bond was issued, making them double-, or potentially "澳洲幸运5官方开奖结果体彩网:triple-exempt."

13🦂. Compensatory Daꦗmages Awarded for Physical Injury or Sickness

Damages awarded for physical injury, physical illness, or emotional distress due to a physical injury or sickness are typically exempt from taxes.

14. Gambling Income (If It Offsets Losses)

澳洲幸运5官方开奖结果体彩网:Gambling income is non-taxable only if your total losses are greater than your total winnings for the tax year. If, on the other hand, your gambling income exceeds your losses, that income is taxable. You need to report separately on your tax forms winnings as income—and can deduct losses up to the amount of your winnings, if you itemize your deductions, as "other itemized deductions."

15. Gifts

If you receive a monetary gift from a relative or friend, you do not owe taxes on that income. If the gift is more than $18,000 for calendar year 2024, or more than $19,000 for 2025, the giver may owe gift tax, but you do not.

16. Combat Pay

The military income you receive while stationed in a 澳洲幸运5官方开奖结果体彩网:combat zone is usually not taxable.

17. Vacation Rental Income (Limited)

If you rent your personal home for less than 15 days during the tax year, then this income does not need to be reported to the IRS.

18. Life Insurance Death Benefits

Generally speaking, when the beneficiary of a 澳洲幸运5官方开奖结果体彩网:life insurance policy receives the 澳洲幸运5官方开奖结果体彩网:death benefit, this money is not counted as taxable income, and the beneficiary does not have to pay taxes on it.

The Bottom Line

While it often seems as if the IRS manages to take a bite out of every type of income you co♛uld possibly earn, there are quite a few exceptions to that rule. Before you assume any income is taxable or nontaxable, double-check with a tax professional or visit the .