Income Exclusion Rule

Every year, you pay income tax (well, most people pay income taxes...you might spend your time sitting on the couch eating Pringles). However, not all income gets counted. Some sources of cash get left out of the calculation.

The income exclusion rule details what income is included for tax consideration and what gets left out. For instance, child support, certain welfare payments, and death benefits from insurance are usually excluded. Also, income from municipal bonds don’t get pinched by income tax either.