J.K. Lasser's 1001 Deductions and Tax Breaks 2022, 2nd Edition

APPENDIX BChecklist of Tax‐Free Items

When items are not included in income, and in some cases not even reported on the return, there are considerable tax savings. Here is a list of tax‐free items for 2021 tax returns.

• 529 plan withdrawals to pay qualified education costs
• ABLE account withdrawals to cover qualified expenses for a disabled beneficiary
• Accelerated death benefits under a life insurance policy
• Adoption costs paid by employer up to $14,440 in 2021
• Awards to certain employees (usually up to $1,600)
• Bequests
• Black lung benefit payments
• Capital gains and capital gain distributions for those with taxable income below a set amount
• Charitable transfers of IRA distributions up to $100,000 by those age 70½ and older (reduced by post‐70½ IRA contributions)
• Child support payments
• Coverdell education savings account withdrawals to pay education costs
• Crime victim payments from a state fund for this purpose
• Damages received for personal physical injury
• Damages received for wrongful incarceration
• Debt discharged during insolvency or bankruptcy
• Dependent care expenses paid by employer up to $5,000
• Disability payments under a policy in which you paid the premiums
• Disaster relief payments and disaster mitigation grants
• Discounts on purchases you make
• Dividends for those with taxable income below a set amount if the dividends are “qualified”
• Economic impact payment
• Education courses paid by employer (fully excluded if job‐related; up to $5,250 if not job‐related)
• Federal Employees' ...