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Definition of Gross Income

What is the definition of Gross Income?

Gross income is defined as total income before taxes, deductions, credits, and allowances have been deducted. Gross income is shown in the middle section of the first page of tax form 1040.

Gross income includes all income in the form of:

  • money,
  • goods,
  • services
  • properties received during the tax year that are not tax exempt
  • income from sources outside the US
Taxable income

Some income sources are taxable while other are not. Below are income sources that are subject to tax.

  • wages, salaries, bonuses and commissions
  • certain types of fringe benefits
  • tips
  • unemployed compensation
  • interest (taxable) and dividends
  • refund of state and local taxes (for taxpayers who itemize their deductions)
  • alimony or separate maintenance payments received
  • self employment income
  • hobby income
  • capital gains from sale of properties
  • pensions and annuities (taxable portions)
  • IRA distributions (taxable parts)
  • taxable portion of social security benefits
  • taxable portion of railroad retirement benefits
  • jury duty pay
  • executor's fees
  • gambling winnings
  • some scholarships and fellowships
  • debt cancellation
  • most court awards

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