We’ll define both and show you the differences, including which types of income qualify as active and which are passive. Both incomes are required throughout your lifetime, but combining the power of ...

Understanding passive activities When you invest in something like a rental property but aren’t deeply involved in its day-to-day management, the IRS considers this a passive activity. It’s not about ...

Passive income is generated through investments or work completed in the past that continues to yield returns without the need for continuous manual input. In the world of finance, it can stem from a ...

Taxation of passive income follows specific principles that distinguish it from active income. Generally, passive income is subject to tax, but the rules and rates can differ markedly from those ...

A recent case, Senty v. United States, provides several important lessons for tax return preparers . Mr. Senty was involved ...

Is Passive Income Subject to Self-Employment Tax? Passive income is generally not subject to self-employment tax, which primarily covers Social Security and Medicare taxes for individuals who work for ...