what is irs publication 525 
publication 525 taxable and nontaxable income is a document published by the internal revenue service irs detailing what types of income taxpayers should consider taxable or nontaxable when filing tax returns 1 a taxpayer s income can come from a number of sources other than regular employment 2 income can be in the form of money property and services unless a type of income is specifically exempted from taxation by law it will be considered taxable income understanding irs publication 525publication 525 outlines how employees are to treat income from retirement plans stock options and fringe benefits and how to report their income from business partnerships real estate investments and disability pensions it also describes how certain employee types such as military personnel and clergy should report their income publication 525 is updated regularly to reflect any changes in tax code or regulations updates may include things such as disaster tax relief for residents recovering from natural disasters such as hurricanes or wildfires 3 taxable income includes any salaries wages and tips however there are many other categories of taxable income 4 income that is available to a taxpayer whether or not that person actually possesses it is considered taxable for example a paycheck that has been handed to a taxpayer before the end of the tax year is considered taxable income even if the person has not cashed that check by the year s end likewise income that is received by an agent of a taxpayer on their behalf is considered taxable even if that third party has not yet handed the money over to the taxpayer prepaid income is also considered taxable for example if a contractor is paid 10 000 to begin a construction job on a house but fails to complete the job before the end of the tax year that 10 000 is still taxable since the contractor received the payment 5 grants are also considered taxable income in addition to interest earned through most investment vehicles fringe benefits are also considered taxable income 2 non taxable income includes welfare payments healthcare benefits inheritances and gifts child support payments cash rebates on items purchased and money reimbursed from qualifying adoptions are also not considered taxable income by the irs 6 if a person receives money through a life insurance policy due to the death of the policyholder that income is considered non taxable however if that person simply cashes in that life insurance policy income received through cashing in the policy may be taxable 7 some scholarships are not taxable though what the scholarship money is used for can determine whether or not the recipient must pay taxes on it 8 