Gross Income

What does Gross Income mean?

Gross income is income from all sources. Gross income includes but may not be limited to wages, salaries, tips, bonuses, commissions, gains from the sale of property, interest, rent, royalties, dividends, alimony payments, annuities, life insurance income, pensions, forgiveness of debt, and distribution of partnership income.

Although the Internal Revenue Service defines gross income as income from whatever source, gross income does not include certain types of money received, as it is simply not deemed to be income to the taxpayer. Gross income does not include payouts on life insurance as the result of the insured's death, money received as a gift, money received as part of an inheritance, certain tax-exempt interest, Social Security benefits up to a phase-out threshold, and scholarships.

Gross income is used as the starting point in calculating adjusted gross income for a taxpayer. As such, gross income does not have any deductions, exemptions, or costs deducted from it.

(Tags - Assets - IRS - Business law )

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