Define: Taxable Income

Business, Legal & Accounting Glossary

Definition: Taxable Income



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Full Definition of Taxable Income


Taxable income is all income that is subject to taxation by the Internal Revenue Service (IRS). Although taxable income is the only type of income that is subject to taxation, reporting of non-taxable income may be required by the IRS. Individuals, businesses, charities, non-profits and even government entities have taxable income.

The IRS maintains an exclusive, rather than an inclusive, definition of taxable income. That is, all income is taxable income unless otherwise stated in the Internal Revenue Code. Some common examples of non-taxable income for individuals are:

– Gifts
– Bequests
– Inheritances
Cash rebates
Travel expenses
– Legal compensation
Adoption reimbursements

The IRS cites the following as examples of taxable income for individuals and businesses:

– Payments from employers
– Revenues from customers
Rent payment from tenants
Cash windfalls
– Fringe benefits
– Royalties

The specific definition of taxable income changes from year to year as the Internal Revenue Code is updated through legislation or executive order.


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Definition Sources


Definitions for Taxable 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: 5th February, 2020