what is gross income

Gross income refers to the total earnings or income a person or business receives before any deductions or taxes are taken out. It includes all sources of income, such as wages, salaries, bonuses, commissions, rental income, investment income, and any other forms of earnings.For individuals, gross income includes their wages or salary from their job, as well as any additional income they receive from investments, rental properties, self-employment, or other sources. Gross income is used to calculate an individual’s tax liability, and various deductions, credits, and allowances are then applied to arrive at the individual’s taxable income, which is the income subject to taxation.For businesses, gross income is the total revenue generated from the sale of goods or services before deducting any expenses, such as the cost of goods sold, operating expenses, and taxes. It is a key financial metric that helps assess the overall revenue-generating capacity of the business.Gross income is an essential concept in personal finance, accounting, and taxation, as it serves as the starting point for calculating various financial metrics and tax liabilities. It is crucial to distinguish gross income from net income, which is the income remaining after all deductions and expenses have been accounted for.

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