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Established Contributor
Cdnewmanpac
Posts: 766
Registered: ‎01-16-2012
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Re: Question about income

Just to clarify, only the interest on a promissary note counts as income (and IS taxable), not payments against principal. If it is a zero interest loan, there is zero income. You are much safer leaving thepayments from a note out of your listed income.

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Regular Contributor
HenryJumbo
Posts: 143
Registered: ‎07-21-2012
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Re: Question about income


Question:   Is child support considered earned income when calculating the earned income credit?

 

Answer:   No.  For purposes of calculating the earned income credit, child support is not considered earned income. 

Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers’ compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans’ benefits, including VA rehabilitation payments. Do not include any of these items in your earned income.

 

http://www.irs.gov/faqs/faq/0,,id=199800,00.html



 

 

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Valued Contributor
rootpooty
Posts: 1,772
Registered: ‎10-28-2011
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Re: Question about income

I would not include child support as annual income. Just for the simple fact that its not guaranteed.  Supporting parent can easily file a motion in court, lose job, get custody, run away, move out of the country! lol.  not trying to be funny but all those are possible which will lead to the person recieving it simply not recieving it.  the list goes on and especially if we are dealing with amex and an FR comes breathing down on you then well......... we all know what happens.

 

and my opinion since they are welcome on this forum is its child support not credit card support

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Regular Contributor
CK_Charles_Lover
Posts: 248
Registered: ‎09-02-2011
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Re: Question about income

I don't have kids but I'm pretty sure you can use credit cards to "support" your children, ie.. school, clothing, food, gas, electric, cable etc.etc. 

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thankfulheart
Posts: 619
Registered: ‎09-26-2011
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Re: Question about income

Um, yea, I out pretty much everything on the credit cards for the kids then pay it off each week with my paycheck and toss the child support on monthly, too.

Didn't realize only the interest on the promissory note counted as the mortgage would have counted t as income had I had 12 months of history. There is no interest, so I will exclude that anyway.
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Established Contributor
cashnocredit
Posts: 1,033
Registered: ‎07-18-2009
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Re: Question about income

[ Edited ]

Cdnewmanpac wrote:

Just to clarify, only the interest on a promissary note counts as income (and IS taxable), not payments against principal. If it is a zero interest loan, there is zero income. You are much safer leaving thepayments from a note out of your listed income.


Maybe. Maybe not. I think it depends on how long the note is for. If you're 70 and the note is a 30 year note it's a whole lot better "income" than an annuity that terminates upon death. A lender is virtually certain to recover outstanding debt from the remaining note principal.  And even annuities are better than job income.  If you buy an annuity a significant part of that annuity is return of principal and not "income" in an IRS sense but is it income from a lender's pov? Sure. It's the best kind. Kinda like having a job for life but with a lower tax rate.

Since my income is largely from selling appreciated investments what exactly is my income. Who the hell knows. I usually just use the minimum AGI for the last 3 years but since I'm retired and am drawing down a small portion (1% or so)  of principal as well do I include that? I don't but arguably I should.

 

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

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Established Contributor
cashnocredit
Posts: 1,033
Registered: ‎07-18-2009
0

Re: Question about income

[ Edited ]

Let's please keep in mind that lenders care about "income" in a broad sense, not the IRS sense. Something may not be IRS income but is still income for purposes of obtaining credit. For instance tax free Munis.

 

CapOne specifically allows "income" to optionally include these types:

 

Alimony, child support, or separate maintenance income need not be revealed if
you do not choose to have it considered as a basis for repaying this loan. We
may require proof of income

 

You don't have to include them if you don't want to but you certainly can.

 

I'm pretty sure Muni interest payouts would count as well.

 

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

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