- Days left

This post was written as part of a series on tax excuses that don't work.

One common argument against paying income taxes is that money received for providing labor or personal services isn't really income. They say that there really is no gain that can be taxed when physical labor is exchanged for money.

Tax protestors further say the tax laws only apply to profits, and there's really no profit in receiving money for services because the money was exactly equal to the effort put forth by the person. If the effort and the money are equal, there can't be profit. Or so they say.

A cute term used to avoid the use of the word "wages" is a "time reimbursement transaction." But no matter what you call it or how you dress it up, your wages are taxable income.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

Advice for Recent College Grads

Prepare yourself for the "real world".

View Course »

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

TurboTax Articles

What Are the Tax Penalties for Smokers?

Starting in 2014, the Individual Shared Responsibility provision of the Affordable Care Act made you responsible for having minimum essential coverage, or MEC, in health insurance. Otherwise, you need to be eligible for a health care exemption, or you could pay a penalty when filing your income tax return. This requirement for minimum essential coverage applies to smokers and nonsmokers alike. If you're not covered by an employer's health plan and are a smoker, you can go to the health care marketplace to find MEC. If you're still unable to comply, you may have a penalty applied.

A Brief History of Income Taxes

Did you know President Abraham Lincoln, one of America's most beloved leaders, also instituted one of its least liked obligations - the income tax? In this brief history of taxes, see the historical events which shaped income taxes in the United States today.

How to Itemize Taxes When Claiming Dependents

Claiming dependents and itemizing deductions is an effective way to save money on your income taxes. Each dependent you claim allows you to reduce your taxable income by one exemption. Get a step-by-step overview on how to take advantage of itemizing your taxes when claiming dependents in this article on tax tips.

Add a Comment

*0 / 3000 Character Maximum