Types of Taxable Income

Study Notes

Taxable income refers to the amount of income that is subject to taxation by the government.
It is the income that is earned by an individual or business during a tax year that is liable to taxation.

Earned Income: Wages, salaries, bonuses, commissions, and tips received from an employer.
Unearned Income: Interest, dividends, capital gains, and rents received from investments and assets.
Self-Employment Income: Income earned from running a business or profession, including income from freelance work.

Employment Income: Salaries, wages, bonuses, and other forms of compensation received from an employer.
Investments: Interest, dividends, and capital gains from investments in stocks, bonds, mutual funds, and other financial instruments.
Business Income: Income earned from running a business, including income from sales, services, and other business activities.
Rental Income: Income earned from renting out properties, such as apartments, houses, or commercial buildings.

Gifts: Gifts received from others, such as inheritances, bequests, and gifts from friends and family.
Life Insurance Proceeds: Proceeds from life insurance policies, including death benefits and cash surrender values.
Scholarships: Scholarships and fellowship grants received for education and research purposes.
Welfare Benefits: Government welfare benefits, such as social security benefits, unemployment benefits, and worker's compensation benefits.

Note: The specific definitions and exclusions of taxable income may vary depending on the jurisdiction and tax laws.

Taxable income is the amount of income subject to taxation by the government.
It is the income earned by an individual or business during a tax year that is liable to taxation.

Earned income includes wages, salaries, bonuses, commissions, and tips received from an employer.
Unearned income includes interest, dividends, capital gains, and rents received from investments and assets.
Self-employment income includes income earned from running a business or profession, including freelance work.

Employment income includes salaries, wages, bonuses, and other forms of compensation received from an employer.
Investments include interest, dividends, and capital gains from investments in stocks, bonds, mutual funds, and other financial instruments.
Business income includes income earned from running a business, including income from sales, services, and other business activities.
Rental income includes income earned from renting out properties, such as apartments, houses, or commercial buildings.

Gifts received from others, such as inheritances, bequests, and gifts from friends and family, are not taxable.
Life insurance proceeds, including death benefits and cash surrender values, are not taxable.
Scholarships and fellowship grants received for education and research purposes are not taxable.
Government welfare benefits, such as social security benefits, unemployment benefits, and worker's compensation benefits, are not taxable.