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

The consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.

The sum of all wages , salaries, profits, interests payments, rents, and other forms of earning received.

Types of Income:

Money derived from paid work.

Income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.

Income from investments, dividends, interest and capital gains.

Tax imposed on individuals or entities (taxpayers) that varies with their respective income or profits (taxable income).

Computed as the product of a tax rate times taxable income. The tax rate may increase as taxable income increases (referred to as ________ or _________).

Total revenue received before any deductions or allowances, as for rent, cost of goods sold, taxes, etc.

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.

(T/F) The amounts included as income, expenses, and other deductions vary by country or system.
True False

Activities that generate income: