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18 Tax-Free Sources of Income

Not all income is treated equal. Ordinary income is treated the worst by the tax code. Long-term capital gains are granted preferential tax treatment. And some income is excluded from income entirely. 

When planning for retirement or any financial goal, taxes play a vital role in how quickly the goal is reached. The more tax-free income you acquire the better.

The tax code in the U.S. taxes all income unless specifically excluded by the code. Many sources of tax-free income is limited in scope, applying to very unique and special situations.

The list below contains 18 sources of federal tax-free income. States usually follow federal, but may have more or fewer items of tax-free income. Every reader should find several types of non-taxable income available to them from the list. 

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