Four Types of Income the IRS Can’t Touch

Not many taxpayers are aware that there are certain types of income the Internal Revenue Service (IRS) cannot touch. No matter how much these activities improve your pocketbook they won’t increase your taxable income.

Collecting Airline Miles

Obtaining frequent flyer miles is not a taxable source of income even though this is a hotly debated topic with the IRS. The only time this can become a problem is when the passenger is compensated in the form of capital.

Rebates

Rebates are considered as a price reduction and not as a form of revenue. Using rebates towards automotive vehicles, alcohol, technology, or other items is not a reportable income for your taxes.

Carpooling

Commuting to work can become profitable if the taxpayer starts up a carpool between co-workers. Any money received from this venture does not have to be included in your income. Commuting costs in general are not deductible, but establishing a car pool where you are compensated for money is a legal way to earn non-taxable income.

Education

Going back to improve your education can be beneficial with a company that can deduct from your amount. Compensation from work to return and enhance your education is tax free as long as it goes toward undergraduate or graduate courses. Any income received from scholarships is also not taxable.

Conclusion

These are just a few examples of income which the IRS can’t touch. Make sure that any business venture you participate in follows along with the rules and regulations of the IRS.

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