How to Claim Untaxed Income on Your Taxes
- 1). Record the rental value of the home you are allocated as part of your compensation if you are a member of the clergy. This value is not subject to incomes tax and should not be included in your gross income. However, if you will pay self-employment tax, it must be included in your Schedule SE form.
- 2). Record the total value of all tax-exempt interest you received in line 8b of your Form 1040. Tax-exempt interest includes interest from municipal bonds or exempt-interest dividends from mutual funds and can be found in box 8 of your 1099-INT Form.
- 3). Write your total IRA distributions in line 15a of your Form 1040, including tax-exempt portions, but only put the taxable portion in line 15b. Most of the time you will only use line 15b, but in the case that you rolled over a distribution, part or all of the distribution was a charitable contribution or you had previous excessive contributions returned to you, you will file Form 8606 and transfer the total in line 25c to line 15b of Form 1040.
- 4). Report the entirety of what you receive in pensions and annuities in line 16a of Form 1040, even if part of it is not taxable. Record the amount listed on your Form 1099-R as taxable in line 16b of Form 1040.
