Think of income categories as bags of money. Gross income has the potential to be the biggest bag because it includes all the ways you get paid throughout the year.
Two more categories to familiarize yourself with that directly relate to gross income: adjusted gross income and earned income. AGI, or adjusted gross income, is a different animal. You might also like: Deductions vs. Start for free Sign In. Related Articles.
Read Article. Earned Income Tax Credit Calculator. Understanding Earned Income. Special Considerations. The Earned Income Tax Credit. Earned Income FAQs. Key Takeaways Earned income is any income that is received from a job or self-employment. Earned income may include wages, salary, tips, bonuses, and commissions.
Income instead derived from investments and government benefit programs would not be considered earned income. Earned income is often taxed differently from unearned income. Employed taxpayers with lower incomes may be eligible for an earned income tax credit EITC.
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Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Terms Unearned Income Unearned income is income acquired from investments and other sources unrelated to employment.
What Is Self-Employment Tax? Self-employment tax is the tax that a sole proprietor or freelancer must pay to the federal government to fund Medicare and Social Security. What Counts as Income? Income is money received in return for working, providing a product or service, or investing capital.
A pension or a gift is also income. What Is the Taxable Wage Base? The taxable wage base is the maximum amount of earned income that employees must pay Social Security taxes on. Form U. Individual Tax Return Form is the standard U. Partner Links. Related Articles. Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.
Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www. Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.
Marriage and Money. Knowing what you earn before taxes and deductions is an important figure to be familiar with, but it is also important to know what that number is after taxes and deductions. What is annual gross income? What is adjusted gross income?
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