H&R Block Chapter 1 Exam Questions and Answers

H&R Block Chapter 1 Exam Questions and Answers Income - ANS ️️ is financial gain derived from labor (work), capital (money), or a combination of the two. The financial gain derived from labor is generally referred to as wages. Unless specifically exempt or excluded by law, all income is subject to income tax and is reported on a tax return. Gross Income - ANS ️️ means all worldwide income from whatever source derived, unless specifically excluded from taxation by law. Gross income includes income realized in any form, whether in money, property, or services. Earned Income - ANS ️️ is received for services performed. Some examples are wages, commissions, tips, and generally farming and other business income. Unearned Income - ANS ️️ is taxable income that does not meet the definition of earned income. It includes money received for the investment of money or other property, such as interest, dividends, rents, and royalties. It also includes pensions, alimony, unemployment compensation, and other income that is not from performing services. Are Social Security benefits taxable income? - ANS ️️ may be included in taxable income. Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits. You will learn more about social security benefits when you read about retirement distributions. Are disability retirement benefits earned income? - ANS ️️ qualify as earned income until the taxpayer reaches minimum retirement age. Minimum retirement age is the earliest age the taxpayer could have received a pension from their