HopefullyInLawSchool
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LSDefine
Simple English definitions for legal terms
gross income
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A quick definition of gross income:
Gross income is all the money someone or a company makes before taking out any expenses or taxes. It includes money from jobs, investments, and other sources. Even if someone gives money to charity, they still have to count it as part of their gross income. For companies, gross income is all the money they make from selling things, minus the cost of making those things. This is important for figuring out how much money they really made.
A more thorough explanation:
Gross income is the total amount of money an individual or business earns before any deductions or taxes are taken out. It includes all sources of income, such as wages, dividends, alimony, capital gains, and pensions. However, some types of income, like gifts and child support, are excluded from gross income.
For individuals, gross income is the total amount of income earned during the taxable year. This includes income from all sources, even if it is not taxable. Deductions, such as those for charitable donations, are applied after calculating gross income. For example, if someone earns $50,000 in wages and $5,000 in dividends, their gross income would be $55,000.
For businesses, gross income is the total revenue earned during the tax year minus the cost of goods sold. This includes all income from sales, services, and other sources. For example, if a company earns $1 million in revenue from goods and the cost of goods sold is $750,000, their gross income would be $250,000.
It is important to note that determining the cost of goods sold can be complex and is often the subject of litigation.