Discover 20+ Ways to Earn Tax-Free Income

💰Inheritances and life insurance proceeds are tax-free for the beneficiaries.

🏦Qualified distributions from Roth accounts, such as Roth IRAs and Roth 401(k)s, are tax-free.

💸Employer reimbursements for health expenses, education assistance, meals, and more, are tax-free benefits.

🏠Capital gains from selling a primary residence can be tax-free up to $250,000 for singles and $500,000 for married couples.

🌞Refundable tax credits like the Child Tax Credit and solar credits can provide tax-free money.

Are gifts taxable income?

—No, gifts are not taxable income for the recipient. However, the person giving the gift may have to pay gift taxes if the amount exceeds certain limits.

Can insurance proceeds be taxed?

—In general, insurance proceeds are not taxable for the recipient, whether it's for health insurance, life insurance, or other types of insurance.

What types of income are tax-free for disabled individuals?

—Disability insurance payments that are made with after-tax dollars are not taxable to the recipient. However, if the disability insurance payments are made by the employer and were deducted from the recipient's pre-tax income, they may be taxable.

What types of reimbursements are tax-free for employees?

—Employer reimbursements for qualified expenses like health reimbursement accounts, home office expenses, and cell phone expenses are tax-free for employees.

Can I receive tax-free income from my retirement accounts?

—Qualified distributions from Roth accounts, such as Roth IRAs and Roth 401(k)s, are tax-free. However, distributions from traditional retirement accounts are generally taxable.

00:00In this video, Toby Mathis discusses various sources of tax-free income.

01:18Qualified distributions from Roth accounts, such as Roth IRAs and Roth 401(k)s, are tax-free.

02:43Employer reimbursements for health expenses, education assistance, meals, and more, are tax-free benefits.

08:01Capital gains from selling a primary residence can be tax-free up to $250,000 for singles and $500,000 for married couples.

13:58Refundable tax credits like the Child Tax Credit and solar credits can provide tax-free money.