The majority of income, including wages, salaries, tips, and self-employment income, is generally taxable. However, several forms of income, including specific gifts and inheritances, life insurance payouts, and eligible scholarships, are excluded from federal income tax. Additionally, certain types of income may be subject to state-specific exclusions or deductions.
There are few exceptions to Kentucky’s general rule that social security benefits are not subject to state income tax. A part of your social security benefits can be subject to taxation if your income exceeds a specified level. Depending on your income level, other retirement income sources including pensions and annuities can also be liable to state income tax. Bottled water is typically chargeable when it comes to sales tax in Kentucky. There are a few exceptions, such as when the water is provided as part of a meal at a restaurant or when it is offered for medical reasons. Masks and gloves are examples of personal protective equipment (PPE), which is similarly taxable in Kentucky unless they are acquired for medical reasons or donated to a charity organization.
In Kentucky, you will additionally owe taxes on your car if you own one. The worth of the car, the county in which you reside, and any applicable municipal taxes are just a few of the variables that will affect how much tax you pay. Taxes typically amount to about 6% of the car’s worth, although this can change based on your unique situation.
In conclusion, even though the majority of income is taxable, Kentucky and other states do allow for some exemptions and deductions. To make sure that you are accurately reporting your income and utilizing all of the available exemptions and deductions, it’s crucial to understand the laws and regulations pertaining to income taxation. You should also seek the advice of a tax expert or utilize trustworthy tax preparation software.