Define: Active Income

Business, Legal & Accounting Glossary

Definition: Active Income



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Full Definition of Active Income


Active income is a form of income for which labour services were performed, such as for self-employment or for another entity. This form of income includes wages, salaries, tips, fees, commissions, and any income from self-employment in which services were performed. The opposite of active income is passive income, in which no labour is performed (but for which income is still received). Active income is defined according to rules set forth by the Internal Revenue Service. The distinction between active income and passive income is important because active income can offer more tax deduction advantages than passive income can. As a rule, one cannot offset active income with passive activity losses. Active income is sometimes called non-passive income as well.


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Page URL
https://payrollheaven.com/define/active-income/
Modern Language Association (MLA):
Active Income. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 10, 2020 https://payrollheaven.com/define/active-income/.
Chicago Manual of Style (CMS):
Active Income. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/active-income/ (accessed: April 10, 2020).
American Psychological Association (APA):
Active Income. PayrollHeaven.com. Retrieved April 10, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/active-income/

Definition Sources


Definitions for Active Income are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February, 2020