Define taxable income?

Taxable income is the portion of an individual's income that is subject to taxation by the government. It is calculated by subtracting allowable deductions and exemptions from gross income. This is the amount on which income tax is calculated and paid.

Taxable income is the amount of an individual's or organization's income that is subject to taxation. It is calculated by subtracting allowable deductions and exemptions from gross income. Gross income includes all income from any source, including wages, salaries, tips, bonuses, self-employment income, dividends, interest, and capital gains. Deductions are expenses that can be subtracted from gross income to reduce taxable income. Allowable deductions include business expenses, mortgage interest, charitable contributions, and certain other expenses. Exemptions are amounts that are subtracted from taxable income before taxes are calculated. Personal exemptions are available for the taxpayer, their spouse, and their dependents. Taxable income is used to determine the amount of income tax that an individual or organization owes. The tax rate applied to taxable income is determined by the tax bracket system. The higher the taxable income, the higher the tax rate.