What is taxable income and how do you know how much taxes are owed? Weegy:
Taxable income is the portion of income that is the subject of taxation according to the laws that determine what is income and the taxation rate for that income. [ Generally, taxable income refers to an individual's (or corporation's) gross income, adjusted for various deductions allowable by statute. The main questions put by most individuals in any jurisdiction are "what makes up my taxable income" and what tax rates should be applied such that I can work out my tax liability to the state. For example, suppose within a year, one person earned $100,000 from work, made $50,000 profit from selling stock, and won the lottery for $1,000,000. This person has, prima facie, an income of $1,150,000. However, some of this income may be taxed at a lower rate, or perhaps not taxable at all. In most western countries, 100% of regular salary (above a certain threshold) is taxable and a portion of Capital Gain (ie profit from selling stock or real estate) is taxable.
In the United States, taxable income is defined in Internal Revenue Code 63. The section sets forth that taxable income means gross income (which is broadly defined in Internal Revenue Code 61) minus whatever deductions are allowed by that chapter of the IRC. Section 63(a) provides that individuals may take itemized deductions to determine their taxable income, which allows them to add up their deductible expenses such as college tuition and charitable donations and then subtract that amount from their taxable income. Alternatively, section 63(b) allows the taxpayer to take a standard deduction in determining their taxable income, which reduces their taxable income by an amount set forth elsewhere in the IRC and then further subtracts the deduction for personal exemptions.
Please note that "income" itself is not defined in the Internal Revenue Code. ] Auto answered|Score 1|ambrosio_09|Points 730|User:
What is taxable income Weegy:
Taxable income is the portion of income that is the subject of taxation according to the laws that determine what is income and the taxation rate for that income. [ Generally, taxable income refers to an individual's (or corporation's) gross income, adjusted for various deductions allowable by statute. ] Auto answered|Score 1|wiseman|Points 689|
Advice|No Subcategories|Auto Answered|12/6/2010 8:47:29 PM