Are any types of investment income non-taxable?

Yes, some types of investment income are non-taxable in Texas. The most common type of non-taxable investment income is dividend income from stocks and mutual funds. This income is generally excluded from taxation in Texas as long as the payer and recipient are both Texas residents. Interest income from bonds and Treasury bills is also exempt from Texas taxes in most cases. However, there are exceptions, such as cases where the interest is derived from a bond issued outside of Texas. In these cases, it may be necessary to pay taxes on the income. Tax-exempt municipal bonds issued by the State of Texas are another type of investment income that is non-taxable. These bonds are exempt from both federal and Texas taxes. Income from certain life insurance policies can also be excluded from taxation in Texas. Generally, this income must be received from a plan that is issued, operated, and located in Texas. Finally, some capital gains may be non-taxable in Texas. Unrealized gains, which are gains on the sale of an asset that have not yet been realized, are likely non-taxable in Texas. Realized gains, however, may be subject to taxation in Texas.

Related FAQs

How do I determine my filing status?
What is the deadline for filing taxes?
What is the self-employment tax rate?
How much money can I expect to get back in a tax refund?
What is the difference between a tax deduction and a tax credit?
What is the tax rate for trusts?
Are Social Security benefits taxable?
What deductions can I take?
What are the tax incentives for buying a home?
Can I write off my business expenses on my taxes?

Are any types of investment income non-taxable?

Related FAQs

Related Blog Posts