In the midst of this pandemic, it is undeniable that the unemployment rate continues to grow. Uncertainty, when the vaccine or drug for the Sars-Cov-2 virus was found, made the economy sluggish. Companies began to streamline employees to cover operational costs because of declining revenues during COVID -19.
However, if you are one of the employees who have been laid off, you don’t have to be hopeless. Keep doing health protocols while you work or work at home. It’s not easy to start your own business. Besides you have to pay taxes, you need capital. But it turns out, not everything you produce or get taxable. Quoted from Forbes, here are 10 non-taxable income.
Fund from GoFundMe or another fun campaign
Assuming there is no business purpose or other non-donor intent, funds received by fundraising campaigns like GoFundMe are not taxable. The donations would be considered gifts: there are no consideration given in returns, no rendered services, no products being touted (there are no premiums for donations, and it doesn’t fit the crowd funding for business models). The result can be different when crowd funding is used for business or investment purposes.
Child Support Payment
Some parents are hesitant to seek out a child support order because, among other things, they fear the extra check would add to taxable income and reduce other benefits, such as the Earned Income Tax Credit (EITC). While alimony may have tax consequences (depending on the timing), child support is completely tax-neutral, meaning that there is no deduction to the payor, and it’s not taxable to the recipient.
Short Term Rental Income
If you rent out your personal residence for less than 15 days in a year, you need not report any of the rental income for federal income tax purposes (nor do you deduct any expenses as rental expenses).
The general rule for children and other dependents is that if income is earned (salary or wages through full-or part-time employment), it is taxed at the child’s tax rate, which means that income under the filing threshold is not taxable. For 2020, what’s old is new again since the SECURE Act repealed the more draconian kiddie tax rules put in place under the Tax Cuts and Jobs Act (TJCA).
Dependent care benefits.
Benefits made available by your employer in the form of a dependent care assistance plan (DCAP) or dependent care flexible spending account (FSA) are not taxable so long as the employer contributions do not exceed $ 5,000 ($ 2,500 if married filing separately).
Health savings accounts (HSA).
If you are an eligible individual, you and any other person, including your employer or a family member, can make contributions to your HSA; those contributions are not included in your income. Additionally, when you take the money out to pay for qualified medical expenses, it’s not included in your income. There is additional flexibility in some plans as a result of the pandemic; check with your HR person for more.