If Someone Steals Money, do they List it on their Income Tax Return Preparation?
Maybe you have at some point, looked at your income tax return with disgust and thought to yourself, "Now this is what I get for making an honest living. If I was a criminal and made my fortune dealing in drugs or stealing from other people's credit cards, the government wouldn't expect me to pay a tax on that, would they?". Actually, you are not alone in thinking that way. Al Capone made a statement to that effect, and he went to jail for years for tax evasion. In fact, when the police find it impossible to catch a criminal on any real charges, they usually find that they can nail them on tax evasion. These may not be the most conservative of income tax return preparation tips, but at the very least, even if they aren't useful, they could be entertaining.
So well then, this is what the IRS considers taxable: anything of value you have coming in - even if you had to steal it to get it to come in. If there were prizes you won at something - you got cash because you were the fastest at your local steakhouse to eat a 24-ounce, or you got a couple of hundred dollars off a box of cereal, or anything - that counts. Let's look at some of the more unconservative income sources you could have, that you're supposed to take in account going in to your income tax return preparation.
How about what you get from insurance? If you had insurance money coming in for perhaps an old relative who died, or for health insurance or personal accident insurance, the good news is that these are not taxable. And that includes money you received as damages for emotional pain or distress - think getting paid damages for being stuck on the tarmac because JetBlue decided to bail on you. You've heard of credit card insurance haven't you? It's insurance you take out against the possibility that you might not be able to pay your credit card bills. If they pay your bill, you need to file for that. Any kind of party where you'd expect to sell something for profit or commission (think a gaming or Tupperware party), any incentive you receive from the company is taxable and whatever you spend on the party, is considered a deductible, as long as it isn't higher than what you earn on the party.
If you run a political campaign of some kind, any contributions you receive for it, are not taxable, unless of course you dip into it to buy yourself a few snappy suits for personal use. However, if you don't feel too bad about accepting a bribe in the course of the campaign, that is not official in any possible view, and so, it's personal and taxable. Do you see a pattern here for what they expect you to bring to the table on your income tax return preparation? If you find an iPod that someone lost (to bad luck), the moment you stop looking for the owner, you are expected to pay taxes on what it would be worth if you went out and bought it in the condition it was in when you found it.
People get their incomes from all kinds of unconventional sources. Whatever you make on jury duty for example, you need to include in your income, on Form 1040. If you have a garage sale, those are taxable on Schedule D. Of course, considering unconventional things like these on your income tax return preparation can be quite complicated; with a little heads up on some of the intricacies, you could probably have a better time at it, than poor Al Capone.
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