by Turquoise Tax Systems | Jun 17, 2026 | Individual Tax
Certain payments received because of sickness, injury, or death are excluded from income when they meet statutory requirements. The exclusions below frequently appear on the EA exam. Workers’ Compensation Workers’ compensation is fully excluded when: Paid under a...
by Turquoise Tax Systems | Jun 17, 2026 | Individual Tax
Education benefits can be excluded from income when they meet specific statutory requirements. These exclusions apply to scholarships, savings bond interest, education savings accounts, qualified tuition programs, and ABLE accounts. Scholarships and Fellowships A...
by Turquoise Tax Systems | Jun 17, 2026 | Individual Tax
Certain disability pensions paid by government services are excluded from income when the disability is connected to active service. These exclusions apply to pensions, annuities, or similar allowances paid for personal injury or sickness arising from service in:...
by Turquoise Tax Systems | Jun 17, 2026 | Individual Tax
Many employer‑provided benefits are taxable unless a specific exclusion applies. A fringe benefit is generally included in income unless the employee pays fair market value or the law provides an exclusion. For tax purposes, even not performing services (such as under...
by Turquoise Tax Systems | Jun 17, 2026 | Individual Tax
A taxpayer may be able to exclude income from the cancellation of qualified principal residence indebtedness. This exclusion applies to debt discharged after 2006 and before 2026. If the exclusion is used, the taxpayer must reduce the basis of the principal residence...
by Turquoise Tax Systems | Jun 17, 2026 | Individual Tax
A taxpayer who meets Section 121 requirements may exclude gain from the sale of a main home. If the exclusion does not apply, the sale is reported on Form 8949 and flows to Schedule D. A main home is the place the taxpayer lives most of the time. It may be a house,...
