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Categories: General Tax Terms

Gross Income refers to the total income earned by an individual or business before any deductions, taxes, or expenses are subtracted. It includes wages, salaries, bonuses, rental income, investment income, and any other sources of income.

For individuals, Gross Income encompasses all income received in the form of money, goods, property, and services that are not exempt from tax. For businesses, it includes all revenue generated from sales of goods and services, minus the cost of goods sold, but before any operating expenses are taken into account.

For example, if an individual earns a salary of $50,000, receives $5,000 in rental income, and has $2,000 from investments, their Gross Income would be $57,000. For a business that generates $200,000 in sales with a cost of goods sold of $120,000, the Gross Income would be $80,000.

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