Intermediate Other Income

A few other items in the Pub 17 that are not covered in the class (see also Pub 525 for a much longer list):

Credit Card insurance: Benefits paid during the year that are more than premiums paid during the year. (Text for the class is not clear on this.)

Peace of Mind payments are taxable. They are reported to the client on a 1099-Misc as other income, should be reported on line 21.

Jury Duty pay is taxable. In Jefferson County, the pay is usually $5 per day (plus $7.50 not taxable to cover parking and lunch). If you must turn the pay over to your employer, the turned over amount is deductible on line 36.

Host or Hostess: If you host a party at which sales are made, any gift you receive for giving the party is a payment for helping a direct seller make sales. You must report it as income at its FMV. Your expenses for hosting are subject to the 50% limit for meals and entertainment and can be deducted on Schedule A, Miscellaneous Deductions (subject to the 2% AGI limit) up to the amount of income reported from this activity.

Also in this category is a free tour from travel agency, if it is given in exchange for you recruiting other paid customers on the trip.

Fees for Services: generally taxable income. Examples: Executor of an estate, election precinct official, notary public.

Alaska Permanent Fund Income: given to Alaska residents, they'll get a statement for it

Bribes: yes, you must report bribes as income

Campaign Contributions received: only taxable if diverted for personal use

Illegal Activites: income from illegal activities must be reported. On Schedule C if this is your business.

Stolen property: you must include the value of property you steal as income unless you return it to its owner in the same year.

Found Property: report FMV as income when you have free title to property

Cash Rebates, such as rebate by mail for the purchase of a computer system, are not income, but reduce your basis in the property.

Employee Awards: should be on your W-2 if taxable. Raffle type prizes are taxable, but service awards are not, unless worth over $1600.

Kickbacks: incentive amounts from businesses are taxable. Example: if you as a car salesperson refer your clients to a certain car insurance company and get cash incentives, these are taxable. If this is part of your regular business, it may need to go on a Schedule C.

Foster Care providers: Generally not taxable.

Court Awards and Damages
A court award (legal settlement) is very likely taxable, but it depends on the reason for the award.

Taxable awards:

• compensation for lost wages or profit
• punitive damages
• in settlement of pension rights
• back pay
• attorney fees (if the underlying award is included in income)

Non-taxable awards:

• awards for physical sickness or injury
• awards for emotional injury or distress

For most taxable legal awards, you may deduct your legal fees on Schedule A, miscellaneous deductions (subject to 2%).

In the case of unlawful discrimination, you may be able to net out the legal fees. This provision includes all workplace discrimination, such as racial and gender discrimination, as well as whistleblowers. To do this on a tax return (first verify with the client and attorney that the award qualifies for this tax treatment) report the full gross award on line 21, and the legal expenses on line 36.