- According to the Internal Revenue Service, almost all income -- whether received as wages or not -- is taxable. Most taxpayers receive the majority of their income from wages and have taxes withheld by their employer. Those who receive income from additional or alternative sources must report it as miscellaneous income on a Form 1099. Income from non-wage sources is usually considered non-employee compensation unless specifically defined as something else, such as dividends or interest. Income realized from self-employment, even for taxpayers with a wage-paying job, is taxable and is reported to the IRS on the Form 1099-MISC.
- Incomes from bartering are fully taxable and qualify as miscellaneous income on a form 1099-B. Bartering involves the direct exchange of goods and services, without the use of money. Nonetheless, because those involved in a barter arrangement are exchanging goods or services with monetarily definable fair market value, a taxpayer who receives a good or service is required to report it as income to the IRS and pay applicable income taxes. Taxpayers report goods or services gained in a barter exchange for the tax year in which they were received.
- Companies and individuals that pay rent in the course of their business or trade are required to report the amount they pay on the Form 1099-MISC. Rental income on personal and business property is considered miscellaneous income and is taxable. According to IRS instructions, rents include both payments made for land or real estate and rentals of equipment or machinery. Rent paid for personal expenses -- such as a residence -- are not reported on the form 1099-MISC.
- IRS rules consider canceled debts miscellaneous income, even if the taxpayer recieves no money from a debt relief arrangement. This is because the debt is a legal obligation that technically resulted in a gain for a taxpayer -- the property or services purchased with the debt -- that becomes an income when the debt is canceled. Taxpayers report income from canceled debts on the form 1099-C. Some types of canceled debt, including student loans, bequests and gifts, mortgages on a principal residence and debts canceled in bankruptcy are excluded from income.