Fill Form 8854 Sections 2023-2024

Welcome to the Tax Lair Pro income tax preparation course. This is module three, and we will be discussing part one of the income section for filing 2018 tax returns. The income section has been divided into six parts, and this is part one. We are currently on page two of the 2018 1040 form. The 1040 form has been scaled down to only 23 lines. In this section, we will also be discussing Schedule one, which covers additional income and adjustments. Gross income is defined as all compensation for personal services. The form of payment is irrelevant; it can be in the form of property or any other means. Income from self-employment is also included in gross income. Unreported compensation, such as tips, is also considered part of gross income. Interest on savings is considered received when it becomes available to the taxpayer. Types of income included in gross income are business income, compensation for services, fees, commissions, fringe benefits, gains from property dealings, interest, rents, royalties, and dividends. Other types of income included are annuities, pensions, partnership income, income from an estate or trust, and alimony. There is a distinction between taxable and non-taxable income. Non-taxable income includes gifts, inheritances, insurance proceeds, sickness and injury payments, welfare payments, and food stamps. Taxable income, on the other hand, includes earned income such as wages, business income, and unearned income such as interest, dividends, and rental income. Social Security income is considered unearned, and a portion of it may be taxable depending on the individual's overall income. Unemployment compensation, despite being unearned, is fully taxable. The total of earned and unearned income is considered gross income. Let's look at a chart that summarizes the taxability of different types of income. Wages and interest are taxable, while child support and inheritance are non-taxable. Workers' compensation is...