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Simple English definitions for legal terms
gross receipts
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A quick definition of gross receipts:
Term: GROSS RECEIPTS
Definition: Gross receipts refer to the total amount of money or other forms of payment received by a business for goods sold or services provided in a year, before any deductions are made. This means that it is the total amount of money a business earns from its customers.
Tax: Gross receipts are important for tax purposes because they are used to calculate a business's taxable income. The Internal Revenue Code (IRC) and the Code of Federal Regulations (CFR) provide guidelines for determining gross receipts.
A more thorough explanation:
Gross Receipts
Gross receipts refer to the total amount of money or other forms of payment received by a business for goods sold or services rendered in a year, before any deductions are made.
- A retail store sells $100,000 worth of merchandise in a year. This amount is considered the gross receipts of the business.
- A consulting firm charges $200 per hour for their services and works for a total of 500 hours in a year. The gross receipts of the firm would be $100,000 ($200 x 500).
These examples illustrate how gross receipts are calculated by adding up all the money received by a business for their products or services, without taking into account any expenses or deductions.