Other Income

Not all types of income are listed in the first section of the Form 1040. For this reason, there exists a line on the 1040 (line 21) for what the IRS calls other income. This other income is usually some event that you receive money that you weren't expecting and did not receive any W-2 form for. The IRS has a well defined list for what they believe other income to be and that list is as follows:

  • Winnings from gambling
  • Lotteries - which could also be a lump-sum payment you receive in place of spreading your lottery winnings out over some period of time
  • Prizes and Awards
  • Raffles
  • Alaska Permanent Fund dividends
  • Distributions from a Coverdell education savings account (taxable)
  • Distributions from a qualified tuition program that are taxable
  • Any taxable distribution from an Archer MSA or a health savings account
  • Canceled debts. On Form 1099-C, the amounts would be shown in box 2
  • Income from a hobby that you were not in for profit
  • Reimbursements from any items that you may have received a deduction for in a previous year
  • Jury duty pay
  • Income from renting a property that you own that you were not in the business of renting the property. In this scenario, it may be more beneficial to file a Schedule E

Following is a list of items that the IRS does not consider to be taxable income:

  • Life insurance proceeds
  • Bequests and gifts (has limits if the gift is from a foreign person)
  • Child support