Unearned Income

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DEFINITION of 'Unearned Income'

Any income that comes from investments and other sources unrelated to employment services.

BREAKING DOWN 'Unearned Income'

Examples of unearned income include interest from a savings account, bond interest, alimony, and dividends from stock. As long as this income is "realized" then it is taxable.

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RELATED FAQS
  1. What investments are available to someone with no earned income?

    Disability income, such as income received by disabled veterans, is not considered "compensation" for the purpose of contributing ... Read Full Answer >>
  2. What is the difference between comprehensive income and gross income?

    Comprehensive income and gross income are similar, but comprehensive income is a specific term used on a company's financial ... Read Full Answer >>
  3. What tax breaks are afforded to a qualifying widow?

    The tax breaks accorded to qualifying widows or widowers include being able to use a tax filing status that allows for a ... Read Full Answer >>
  4. How is income taxed on prorated salary?

    Since yearly income is viewed by the Internal Revenue Service (IRS) as the total amount of income a person has made over ... Read Full Answer >>
  5. How can I tell which of my business expenses count as write-offs?

    Any basic, reasonably necessary expenses incurred in running a business can be considered possible write-offs. Such expenses ... Read Full Answer >>
  6. What is the difference between a write-off and a deduction?

    There is no difference between a tax write-off and a tax deduction. It's possible that the confusion arises between a tax ... Read Full Answer >>

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