You can also take deductions for costs relating to criminal activity!
You can also take deductions for costs relating to criminal activity!
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Yeah, they got Al Capone for tax evasion, and they’ll get you for confessing to a crime on official government documents.
Line 8z is "all other types of income" it's not specifically "income from crimes."
It's just a catch all for anything not covered in A through P. Like, gambling winnings or unreported cash tips. The IRS just wants their cut. They don't actually care where the money comes from. An insurance payout might go on that line.
They're already getting their cut from sales tax after an insurance payout. That ain't income. Do I get to also declare a loss on anything lost, stolen, or depreciating in value?
Edit: downvotes from people overpaying the IRS, or who've never had to make an insurance claim
Literally yes. In fact about half of the lines 8 are to report losses.
Income is any income, you pay a sales tax when you buy goods, the merchant pays income tax on those same dollars. Or they would if somehow during a record profit year they actually made no money.
No. Insurance payouts are not overall taxable. You also cannot claim depreciation on your personal vehicle, and if you lose property, the IRS doesn't give a shit.
Certain insurance payouts, specifically those that exceed your premiums, are taxable. Lump sum payments generally aren't unless it's a benefit provided by your employer in excess of 50k, but annuities are taxable. As would be any interest you collect on those policies.
Depreciation on a vehicle you use to generate income is deductable, as would be say, depreciation on a home you rent out. And if you rent out rooms in your personal home but don't run a business renting out property, that income needs to be reported too.
This discussion has only been about personal taxes, so stop bringing up business taxation.
Are you talking solely about life insurance? Because that is one very specific thing, and payouts from that are not in the same category at all as any other typical insurance.
Which is why there's a line for other undeclared income.
The whole conversation is about line 8 not exclusively being for crimes.