Asked by Talia Miller on Jul 16, 2024
Verified
Wages,salaries,and tips are compensation for services rendered.However,commissions,bonuses,and severance pay are not taxable.
Wages
Payment to an employee from an employer for the labor or services performed, typically calculated on an hourly, daily, or piecework basis.
Salaries
Fixed regular payments made by an employer to an employee, typically expressed as an annual sum and taxed as ordinary income.
Tips
Additional money given to service workers for performed services, which is considered taxable income by the IRS.
- Identify the variations between taxable and non-taxable income categories.
Verified Answer
TG
Tiana GondolaJul 22, 2024
Final Answer :
False
Explanation :
Commissions, bonuses, and severance pay are considered taxable income and are subject to federal income tax.
Learning Objectives
- Identify the variations between taxable and non-taxable income categories.