Income – Other Income

Time Requirement: 30 minutes

Purpose

Students will learn how to properly report other types of income, including income from worldwide sources, on Form 1040. The International part of this lesson will help you report income earned from worldwide sources.The lesson also explains how to apply the rules for the foreign earned income exclusion.

Objectives

Determine:

• Other types of income and how to report them
• Determine the requirements for the cancellation of debt on nonbusiness credit card debt when preparing tax returns
• Determine when canceled credit card debt is included in gross income on Form 1040
• How to properly report income earned from worldwide sources
• Who is eligible for the foreign earned income exclusion
• How to calculate the excludible amount using Form 2555, Foreign Earned Income

Teaching the Lesson

Refer to the Lesson Plan for helpful instructor notes, visual aids, TaxSlayer® demo, and Internet links.

Refer students who may want to work independently to Publication 4491, Other Income.

Key References

This lesson will refer to the following publications and forms:

• Form 13614-C
• Pub 4012, Income tab
• Pub 17, Chapter 12, Other Income

All references to materials can be found by clicking the Job Aids and Media button. There are also links to helpful tools that can be found on the irs.gov public portal. For this lesson the student can link to the following sites for additional help:

• FAQs - Exchange Rates
• FAQs - Foreign Earned Income Exclusion
• Tax Topics: Gambling Winnings and Losses
• Tax Topics: Certain Qualified Medicaid Payments
• Tax Topic – Foreign Earned Income Exclusion

TaxSlayer® Demos and Tutorials

It is recommended to go to the Practice Lab and access the latest TaxSlayer tutorial for this lesson. The TaxSlayer tutorials can be found by going to the Practice Lab and clicking on the link for TaxSlayer IRS training.

It is recommended to go to the Practice Lab and access the latest TaxSlayer tutorial for this lesson. The TaxSlayer tutorials can be found by going to the Practice Lab and clicking on the link for TaxSlayer IRS training.

Publication 4012, Income tab, will include instructions and tips on how to report other types of income in TaxSlayer.