Taxable income

Taxable income is a taxpayer's gross income, minus any allowable tax deductions. A tax rate is applied to the taxable income figure to determine the amount of tax payable by a taxpayer. Many types of income can be included within the taxable income classification, including the following:

  • Compensation
  • Dividend income
  • Gambling winnings
  • Interest income
  • Lottery winnings
  • Profits from the sale of real estate
  • Profits from the sale of securities
  • Tip income

Other types of income are not classified as taxable income, including the following:

  • Child support payments
  • Income paid into a retirement account
  • Inheritances
  • Scholarships
  • Welfare benefits
  • Workers' compensation payments