Ways to get money without paying tax

Years ago a Forbes list by Kelly Phillips Erb, 50 Perfectly Legal Ways To Get Money & Benefits Without Paying Taxes, was the most-requested handout in many tax offices. The 2017 tax act, the pandemic laws and the 2025 act have changed enough that it needed rewriting, not reprinting. This is that rewrite for 2026 law, with the items that are gone marked as gone and the new ones added, followed by what a planner does with such a list.

From family, friends, and luck

Money that comes to you because someone wanted you to have it.

1. Gifts and inheritances. Not income to the recipient, in any amount. The giver may owe a gift tax return above $19,000 per person in 2026.
2. GoFundMe and other fundraisers. Money given out of generosity, with nothing promised in return, is a gift, even when the platform issues a 1099-K.
3. Child support. Not deductible by the payer, not taxable to the recipient. Alimony from divorces finalized after 2018 is treated the same way.
4. Life insurance proceeds. Paid because of the insured’s death, not taxable, lump sum or installments (the interest on installments is).
5. Money from a Roth IRA or Roth 401(k). Qualified withdrawals, after five years and age 59½, are tax-free, growth included. See Roth IRAs.
6. Rebates. A cash rebate from the manufacturer or dealer is a price reduction, not income.
7. Your own tax refund. A federal refund is never income. A state refund is income only if you itemized the state tax the year before and got a tax benefit from it.
8. Foreign currency. A gain of $200 or less on a personal foreign-currency transaction is ignored.

From your employer

Benefits that come out of the paycheck before it is taxed, or never go on it at all. Most must be set up by the employer in writing.

9. Health insurance from your employer. Premiums the employer pays are not income. Your own share through a cafeteria plan is excluded too.
10. Health savings account contributions. Employer contributions are excluded, your own are deductible, and medical withdrawals are tax-free. 2026 limits: $4,400 self-only, $8,750 family. See HSAs.
11. Dependent care assistance. Up to $7,500 a year under an employer plan from 2026, up from $5,000.
12. Employer educational assistance. Up to $5,250 a year of tuition, fees, books and supplies, and now permanently, payments on your student loans.
13. Adoption assistance. Up to $17,670 of employer adoption benefits excluded in 2026.
14. Group-term life insurance. The first $50,000 of coverage is free; coverage above that is added to the W-2 from an IRS table.
15. Employee achievement awards. Tangible property, the watch rather than a gift card, for length of service or safety, up to $1,600 a year from a written plan.
16. Holiday turkeys and other de minimis items. Small things an employer cannot reasonably account for are excluded. Cash and gift cards in any amount are not.
17. Employee discounts. Discounts on what your employer sells, up to the employer’s gross profit on goods or 20% on services.
18. Occasional tickets. Occasional theater or game tickets from the employer are de minimis. Season tickets are wages.
19. Meals on the premises. Furnished for the employer’s convenience, on the premises, excluded. The employer’s deduction for them ends after 2025.
20. Lodging on the premises. Excluded if furnished for the employer’s convenience, on the business premises, and as a condition of employment.
21. The on-site gym. An employer-operated facility on the premises is excluded. A paid club membership is wages.
22. Transit passes and parking. Up to $340 a month each for transit and for parking in 2026.
23. Carpool money. Reimbursements from riders for driving the carpool are not income.
24. Airline miles. Miles earned on travel, even travel the employer paid for, are not income when used.
25. A company car for business. Business use is not income. Personal use goes on the W-2 at an IRS value.
26. The company cell phone. Provided primarily for business reasons, the personal use of it is excluded too.
27. Retirement plan deferrals. Tax-deferred rather than tax-free: 401(k) deferrals up to $24,500 in 2026 ($8,000 more at 50, $11,250 at 60–63) and IRA contributions to $7,500 ($8,600 at 50) are taxed only when withdrawn. See retirement savers.
28. Moving expense reimbursements. Mostly gone. Taxable since 2018 for everyone except active-duty military moving on orders.
29. Sick pay from a policy you paid for. Accident or disability benefits are tax-free if you paid the premiums with after-tax money. If the employer paid, the benefits are wages.
30. Workers’ compensation. Amounts paid under a workers’ compensation law for an occupational injury or illness are fully excluded.

From your home and investments

The exclusions that reward owning things.

31. Selling your home. Up to $250,000 of gain, $500,000 on a joint return, if you owned and lived in it two of the last five years. See your home as income.
32. Renting your home for 14 days or less. Rent it out for 14 days or fewer in the year and the rent is not reported at all. Fifteen days and all of it is.
33. Municipal bond interest. Interest on state and local bonds is exempt from federal tax. It still counts toward taxing Social Security.
34. Savings bond interest used for college. Series EE and I bonds cashed to pay tuition the same year, with a phase-out starting at $104,700 single and $157,100 joint for 2026.
35. Qualified small business stock. Gain on stock in a qualifying C corporation held five years is excluded up to $10 million, or $15 million for stock issued after July 4, 2025.
36. Growth in a 529 plan. Earnings come out tax-free for tuition, up to $20,000 a year of K–12 tuition from 2026, apprenticeships and $10,000 of student loans.
37. Appreciation you never sell. Gain is taxed only when realized; die holding it and the basis steps up, so the gain disappears for good. See the step-up.
38. Opportunity zone gains. Gain reinvested in a qualified opportunity fund is deferred, and the growth on the fund is excluded after ten years.

From government, insurance, and hard times

Payments that replace something you lost.

39. Veterans’ benefits. Disability compensation, pensions, education benefits and VA insurance proceeds are all exempt.
40. Social Security, for some. Tax-free if it is your only income; otherwise up to 85% is taxed above the $25,000 and $32,000 base amounts. See Social Security.
41. Medicare benefits. Benefits under Parts A, B and D are not income to the person for whom they are paid.
42. Public assistance. Welfare, SNAP, housing and energy assistance and other need-based payments are excluded.
43. Disaster relief payments. Qualified payments for living, repair and funeral expenses after a declared disaster are excluded.
44. Damages for physical injury. Compensatory damages for physical injury or sickness are not taxable. Punitive damages, interest, and emotional distress without a physical injury are.
45. Black lung benefits. Treated like workers’ compensation; excluded.
46. Canceled debt while insolvent or in bankruptcy. Forgiven debt is income, except in a bankruptcy case or to the extent you were insolvent the day before. See cancellation of debt.
47. Forgiven mortgage debt. Mostly gone. The exclusion for forgiven debt on a main home ran from 2007 through 2025 and was not extended.
48. Forgiven student loans. Discharges for death or disability, Public Service Loan Forgiveness and teacher loan forgiveness are tax-free.
49. Peace Corps allowances. Living allowances are excluded; the readjustment allowance paid at the end is not.
50. Medicaid waiver payments. Payments for caring for a disabled person in the caregiver’s own home are excluded.
51. Wrongful incarceration. Damages and restitution for a wrongful conviction are excluded.
52. Olympic and Paralympic medals. The value of the medal and the prize money from the USOC are excluded, for athletes with income of $1 million or less.

From school, public life, and the new law

The rest, including what changed in 2025.

53. Scholarships and fellowships. Tax-free for a degree candidate to the extent spent on tuition, fees, books and required supplies. Room and board is income.
54. Campaign contributions. Not income to the candidate if used for the campaign or kept for a future one.
55. Historic preservation grants. Payments under the National Historic Preservation Act to preserve a historically significant property are excluded.
56. Foster care payments. Payments from a state or agency for a foster child in your home are excluded.
57. Your kids’ first dollars. A child’s wages are taxed at the child’s own rates: nothing up to the $16,100 standard deduction in 2026.
58. Trump accounts. New in 2026: a child’s account that grows tax-deferred, with a $1,000 federal seed deposit for children born 2025–2028 and employer contributions of $2,500 excluded from income.
59. Tips, overtime, car loan interest, and the senior amount. New deductions for 2025 through 2028: up to $25,000 of tips, $12,500 of overtime premium ($25,000 joint), $10,000 of car loan interest, and $6,000 per person 65 and over, all with income phase-outs. See the new deductions.

Making it happen on purpose

The list above is what the law excludes. A planner’s job is to route money through those doors instead of around them.

Give appreciated stock, not cash

Stock held more than a year that has gone up is a better gift than cash. You deduct the full market value on the day of the gift if you itemize, and the capital gains tax on the growth is never paid by anyone. Held a year or less, the deduction is limited to what you paid. If the stock has lost value, do the opposite: sell it, keep the capital loss, and give the cash.

The gift is complete when the shares leave your account, not when you sign the broker’s letter of instruction, so start in November, not December 28. Get the charity’s written acknowledgment with the date and number of shares. Stock gifts over $5,000 go on Form 8283 but need no appraisal. The deduction is limited to 30% of adjusted gross income (60% for cash), with a five-year carryover, and from 2026 the first 0.5% of AGI of total gifts is not deductible. See charitable giving.

The other nine

• The qualified charitable distribution. At 70½, give up to $111,000 in 2026 straight from the IRA to charity. It counts toward the required distribution and never appears as income. See giving from your IRA.
• Fill the pre-tax accounts first. 401(k), HSA, dependent care and the cafeteria plan all turn taxable wages into excluded ones with a payroll election. The HSA is the only account excluded going in, growing, and coming out.
• Hold the winners; harvest the losers. Long-term gain is taxed at 0% up to $49,450 of taxable income single and $98,900 joint in 2026; a low-income year is the year to sell at 0% or convert to a Roth at 12%.
• Let the step-up do the work. Give cash to the kids while living; leave them the appreciated house and stock, which take a new basis at death.
• The 14-day rental. A business you own can rent your home for up to 14 days a year at a market rate for meetings, deduct the rent, and you report nothing.
• Pay for disability insurance yourself, with after-tax dollars, so the benefits are tax-free when you are living on them.
• Put the kids on the payroll. A child’s wages from the family business are deductible to the business, taxed at the child’s zero rate up to the standard deduction.
• Sell the house every two years, if you are a serial renovator: the $250,000/$500,000 exclusion resets after two years of ownership and use.
• Use the new deductions while they last. Tips, overtime, car loan interest and the senior deduction run 2025 through 2028.