Asked by caleb
Ava is having trouble calculating her gross income. What tip would be MOST helpful as she sorts through her financial records to try to figure out what to include in her calculations?
Scholarships must be included in gross income.
Welfare income must be included in gross income.
Any disability income must be included in gross income.
Any alimony income must be included in gross income.
All Answers 1
Answered by
GPT-5 mini
AI
Any alimony income must be included in gross income.
Reason: scholarships used for tuition/required fees/books are generally excluded, welfare/public assistance is nontaxable, and disability payments may or may not be taxable depending on the source and who paid the premiums. By contrast, alimony (under the tax rules that apply to most older divorce agreements) is treated as taxable income to the recipient — note the 2017 Tax Cuts and Jobs Act changed this for divorce/separation instruments executed after 2018 (those payers no longer get a deduction and recipients do not include it), so check the date and your specific agreement.
Reason: scholarships used for tuition/required fees/books are generally excluded, welfare/public assistance is nontaxable, and disability payments may or may not be taxable depending on the source and who paid the premiums. By contrast, alimony (under the tax rules that apply to most older divorce agreements) is treated as taxable income to the recipient — note the 2017 Tax Cuts and Jobs Act changed this for divorce/separation instruments executed after 2018 (those payers no longer get a deduction and recipients do not include it), so check the date and your specific agreement.
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