Income Sources You Might Not Know Are Taxable by the IRS
IRS Taxable Income Sources
Most of us are resigned to the fact that paying taxes is a part of life. And because of this, we're generally aware that when we earn money, whether it's from a full-time job or a side hustle, the IRS is entitled to a cut of our pay. It's not just job-related earnings the IRS can go after. Here are three lesser-known income sources that the IRS can get its hands on.
1. Savings account interest
If you have money in a high-yield savings account right now, you may be pretty happy with yourself. But don't make plans to spend all of that interest income just yet. The IRS taxes interest earnings as ordinary income, subjecting it to your highest tax rate.
2. Dividends
Dividend income is subject to taxes but taxed more favorably. Qualified dividends are taxed at a rate of 0% to 20% in 2024, depending on your income.
3. Unemployment income
The IRS will come after a portion of your unemployment benefits, despite the circumstances. Knowing what income sources are taxable can help you prepare for potential tax obligations.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.