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LSDefine
Simple English definitions for legal terms
active income
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A quick definition of active income:
Active income is money that someone earns from working or running a business. It can also come from investments, gifts, or royalties. This is different from passive income, which is money earned without actively working or participating in an activity. Gross income is the total amount earned before taxes and deductions, while net income is the amount earned after taxes and deductions. Taxable income is the amount of income that is subject to taxes.A more thorough explanation:
Active income refers to the money or payment that a person receives from their employment, business, investments, royalties, gifts, and other sources that require active participation. This type of income is earned through one's own labor or services.
- Wages or salary earned from a job
- Income earned from a trade or business
These examples illustrate active income because they are earned through active participation and labor.