What is taxable income?
A resident is subject to tax on all items included in total federal income. Taxable income includes: • Salaries, bonuses, wages, commissions, fees, vacation pay, profit sharing plan income and other compensation regardless of where earned. • Deferred compensation distributions. • Fair market value of merchandise or services received as compensation. • Net profit from operation of a business or profession or other activity regardless of where earned. • Income from a partnership, S corporation, estate or trust, interest from bank accounts, credit unions, savings and loan associations and other income regardless of where earned. • Rental income, capital gains and dividends. • Lottery winnings won after December 30, 1988. A nonresident is subject to tax on all items included in total federal income, which are derived from or connected with Grand Rapids sources. Taxable income includes: • Salaries, bonuses, wages, commissions, fees, vacation pay, profit sharing plans and other compensation
Taxable income is gross income made by an individual or business that is considered taxable by a state or country, or both in the US. There are certain things, depending upon income level and other country-mandated deductions, that are reduced from the amount of income considered taxable. For example, a certain amount of contributions made toward a person’s 401k is not taxable income, and amounts deducted for social security payments in the US are usually removed and considered not taxable either. The degree to which your income is taxable is dependent, in a progressive tax system, on certain allowable deductions. If you make income below the poverty level, it’s unlikely that you’ll pay much in the way of taxes, if any at all. People with middle incomes are granted individual deductions for self-support when they file their taxes, and also for the support of any others in their home, like spouses and dependent children. These deductions are subtracted from gross income levels to determ
The Internal Revenue Code defines Gross Income as income from derived all sources whatsoever. Taxable Income is Gross Income less allowable deductions. For individuals, these deductions may be Schedule A deductions or personal exemptions. For businesses, these deductions will be reasonable expenses incurred in the ordinary course of your business.
