What is earned income for taxes?
Earned income is generally money you work for, rather than money derived from other sources, such as interest. The Internal Revenue Service (IRS) taxes most earned income, and provides an “earned income credit” for individuals and families who qualify.Obtaining Earned IncomeAccording to the IRS, there are two ways you can earn income. The first is to be employed by someone else. The second is to own a business. Either way, an individual derives a salary by working for a taxable wage.Unearned incomeThere are ways we get money without actually working for it. Among other things, the IRS list includes interest or dividends, certain pension benefits, unemployment, child support, and Social Security benefits.These monies are sometimes taxable, but they don’t count as earned income.Special RulesSome earned income is exempt from taxes. For instance, certain military benefits, like on-post housing, or combat pay, are tax free. Religious leaders also enjoy tax-free housing. Other examples inclu
