Generally people are employees
and that is not difficult to determine. You just go to work for a company
and it is extremely obvious that you are employee. If you have your own
business establishment for example it would be very obvious that you
are not an employee. However, there are some individuals for whom this is
not so clear. You generally would not be an employee you are not subject to
the will and control of the person who employs you as to what you do and how
you do are doing what you do.
Fringe benefits you receive in connection with
the performance of your services are included in your income as
compensation unless you pay fair market value for them or if
they are specifically excluded by law. Abstaining from the performance of
services such as when you have a covenant not to compete would not be
considered a fringe benefit.
A fringe benefit is a form of
pay for the performance of services such as allowing an employee to use a
business vehicle to commute to and from work. You are the recipient of a
fringe benefit if you perform the services for which the fringe benefit is
provided.You
are considered to be the recipient of a fringe benefit even if it is given
to another person.If
you are a partner, director, or independent contractor, you can also be the
recipient of a fringe benefit. You don't have to be an employee of the
fringe benefit provider in order to be a
recipient of a fringe benefit.
Money you receive for the use
of real estate or other property is taxable to you as rental income and you
can deduct the expenses associated with such income. If you rent out personal property, such as
equipment or vehicles, how you report your rental income and
expenses is generally determined by whether or not the rental
activity is a business and whether or not the rental activity is conducted
for profit. Generally, if your primary purpose is income or
profit and your are involved in the rental activity with
continuity and regularity, then your rental activity is a
business.
Interest Income
Most interest that you either receive or is credited
to your account and that can be withdrawn without penalty is taxable income.
Examples of taxable interest are interest on bank accounts, money market
accounts, certificates of deposit, and deposited insurance dividends.
Interest on insurance dividends left on deposit with the U.S. Department of
Veterans Affairs, however, is not taxable. Interest on Series EE and Series
I U.S. Savings Bonds generally does not have to be reported until the
earlier of when the bonds mature or are redeemed. Interest from these bonds
issued after 1989 may be excluded from income if used to pay for qualified
higher educational expenses during the year and other requirements are met
for the Educational Savings Bond Program. Excludable interest from redeemed
U.S. savings bonds used to pay qualified higher education expenses is
figured on Form 8815, Exclusion of Interest From Series EE and I U.S.
Savings Bonds Issued After 1989, and shown on Form 1040A or 1040, Schedule
B.
Certain distributions commonly referred to as
dividends are actually interest. They include "dividends" on deposits or on
share accounts in cooperative banks, credit unions, domestic building and
loan associations, domestic federal savings and loan associations, and
mutual savings banks. You should receive Copy B of Form 1099-INT, Interest
Income, from the payer of these dividends. You must report to the IRS all
taxable interest received even if you do not receive Copy B of Form
1099-INT.
