{"id":13892,"date":"2023-03-27T18:31:55","date_gmt":"2023-03-27T23:31:55","guid":{"rendered":"https:\/\/blog.eztaxreturn.com\/?p=13892"},"modified":"2023-06-01T07:38:58","modified_gmt":"2023-06-01T12:38:58","slug":"surprising-things-you-probably-didnt-know-were-taxable","status":"publish","type":"post","link":"https:\/\/staging.eztaxreturn.com\/blog\/surprising-things-you-probably-didnt-know-were-taxable\/","title":{"rendered":"Surprising Things You Probably Didn\u2019t Know Were Taxable"},"content":{"rendered":"

Let’s say you\u2019re walking down the street and out the corner of your eye you spot a $100 bill on the ground.\u00a0 Finders keepers, right?\u00a0 Not so fast.\u00a0 Whether you find money or property, the IRS expects you to report your windfall, so they can tax you accordingly.\u00a0 But their greed doesn\u2019t stop there, check out what other surprising things are taxable.<\/p>\r\n

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Social Security benefits<\/strong><\/h2>\r\n

The average Social Security check is $1,694.\u00a0 Depending on your lifestyle, that may not be enough to cover all the bills.\u00a0 Although the obvious solution is to earn extra income, it can actually end up costing you money.\u00a0 Social Security benefits usually aren’t taxable if it’s your only source of income.\u00a0 However, those rules go out the window when additional income is involved. Single filers can be taxed on up to 50% of their benefits if their combined income is between $25,000 and $34,000.\u00a0 Married couples filing a joint return can face the same fate once they earn between $32,000 and $44,000.\u00a0 Up to 85% of your benefits may be taxable if you earn more than those amounts.\u00a0<\/p>\r\n

Receive Social Security and additional income?\u00a0 Use the formula below to determine if you\u2019ll need to pay taxes on your benefits.<\/p>\r\n

Your adjusted gross income + Nontaxable interest + \u00bd of your Social Security benefits = Your combined income<\/em><\/p>\r\n

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Canceled debt<\/strong><\/h2>\r\n

Sometimes when you\u2019re over your head in debt, a lender will agree to settle for less.\u00a0 If that happens, the IRS expects you to pay taxes on the canceled amount.\u00a0 Even if the cash never touches your hands, the IRS still views it as income.\u00a0 Typically, you\u2019ll receive a Form 1099-C from your lender if the canceled amount exceeds $600.<\/p>\r\n

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Unemployment income<\/strong><\/h2>\r\n

Unemployment benefits help countless people keep the lights on while they\u2019re in-between jobs.\u00a0 But, by no means is it free money.\u00a0 It’s taxable income for which you will receive a Form 1099-G<\/a> to report on your tax return. The simplest way to avoid an unwanted surprise is to request to have taxes withheld from your pay.\u00a0 To do this, complete and submit Form W-4V to the paying agency.<\/p>\r\n

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Scholarships<\/strong><\/h2>\r\n

With tuition prices continuing to rise, it\u2019s no surprise that many students rely on scholarships to help foot the bill.\u00a0 However, winning a scholarship may get more than you bargained for.\u00a0 Generally, if your scholarship is used to pay for tuition, enrollment fees and course-related expenses, you\u2019re in the clear.\u00a0 But, if your free ride covers room and board or living expenses, you\u2019ll probably have to pay up.<\/p>\r\n

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Gambling winnings and prizes<\/strong><\/h2>\r\n

Won money from a scratch off game?\u00a0 You\u2019re not the only one doing a happy dance.\u00a0 When you win, Uncle Sam does too.\u00a0 It doesn\u2019t matter how you score your windfall, the IRS expects you to pay taxes on cash and non-cash prizes.\u00a0 You’ll receive a Form W2-G<\/a> if you win:<\/p>\r\n