Definition of: Income, Income Tax, Gross Income, and Taxable Income

  1. The consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.
  2. The sum of all wages , salaries, profits, interests payments, rents, and other forms of earning received.
  3. Types of Income:
    • Earned Income
    • Passive Income
    • Portfolio Income
  4. Money derived from paid work.
    Earned Income
  5. Income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.
    Passive income
  6. Income from investments, dividends, interest and capital gains.
    Portfolio Income
  7. Tax imposed on individuals or entities (taxpayers) that varies with their respective income or profits (taxable income).
    income tax
  8. Computed as the product of a tax rate times taxable income. The tax rate may increase as taxable income increases (referred to as ________ or _________).
    Income Tax, graduated or progressive rates
  9. Total revenue received before any deductions or allowances, as for rent, cost of goods sold, taxes, etc.
    Gross Income
  10. Refers to the base upon which an income tax system imposes tax. Generally, it includes some or all items of income and is reduced by expenses and other deductions.
    Taxable income
  11. (T/F) The amounts included as income, expenses, and other deductions vary by country or system.
  12. Activities that generate income:
    • Working a job
    • Owning a Business
    • Gambling
    • Consulting
    • Rental Income or Note Income from Business
    • Creating and Selling Intellectual Property
    • Buying and Selling Real Estate
    • Affiliate or Multi-level Marketing
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Definition of: Income, Income Tax, Gross Income, and Taxable Income
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