TAXABLE INCOME Meaning and
Definition
-
Taxable income refers to the portion of an individual or entity's total income that is subject to taxation by the government. It represents the remaining income after deducting any allowable tax deductions, exemptions, or credits from the gross income.
Taxable income is typically calculated by subtracting eligible deductions and exemptions from gross income. Deductions may include expenses such as mortgage interest, business expenses, certain medical expenses, and charitable contributions. Exemptions, on the other hand, provide a certain amount of income that is not subject to taxation, typically for dependents or the taxpayer themselves.
Once the deductions and exemptions have been subtracted from the gross income, the resulting amount is considered the taxable income. This is the amount that is used to determine the applicable tax rate or tax bracket that the taxpayer falls into. The tax rate varies depending on the jurisdiction and the taxpayer's income level.
Taxable income is a key element in determining the amount of tax liability owed to the government. Taxes may be calculated using progressive tax rates, where higher income levels are subject to higher tax rates. The tax liability is generally calculated based on the taxable income, and the higher the taxable income, the higher the tax liability.
It is important for individuals and entities to accurately determine their taxable income and comply with the tax laws in their jurisdiction to avoid any potential tax issues or penalties.
Common Misspellings for TAXABLE INCOME
- raxable income
- faxable income
- gaxable income
- yaxable income
- 6axable income
- 5axable income
- tzxable income
- tsxable income
- twxable income
- tqxable income
- tazable income
- tacable income
- tadable income
- tasable income
- taxzble income
- taxsble income
- taxwble income
- taxqble income
- taxavle income
- taxanle income
Etymology of TAXABLE INCOME
The word "taxable" originates from the Latin word "taxabilis", which means "subject to tax" or "capable of being taxed". The term "income" has its roots in the Latin word "incomptus", meaning "not easily counted or assessed". Over time, the term "income" evolved to denote the money or financial gain generated from various sources. When combined, "taxable income" refers to the portion of an individual or entity's income that is subject to taxation.
Infographic
Add the infographic to your website:
