Taxable income definition
/What is 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 compensation, dividend income, gambling winnings, interest income, lottery winnings, profits from the sale of real estate, profits from the sale of securities, and tip income.
Income Not Classified as Taxable Income
Other types of income are not classified as taxable income, including child support payments, income paid into a retirement account, inheritances, scholarships, welfare benefits, and workers’ compensation benefits.