Gross income is the total income you receive during the year before any deductions or taxes are subtracted.
For tax purposes, the IRS defines gross income as:
All income from whatever source derived, unless specifically excluded by law.
Gross income includes more than just wages—it covers income from many different sources.
Examples of Gross Income
Here are common types of income that count as gross income:
Earned Income
- Wages, salaries, and tips
- Commissions and bonuses
- Self‑employment or gig income
Unearned Income
- Interest and dividends
- Rental income
- Alimony (only if the divorce was finalized before 2019)
- Unemployment compensation
- Social Security benefits (may be partially taxable)
- Pensions and annuities
Other Income Sources
- Gambling winnings
- Prizes and awards
- Bartering income
(You report the fair market value of goods or services received)
What’s Not Included in Gross Income?
Some income is excluded by law and does not count toward gross income, including:
- Child support payments received
- Gifts and inheritances
- Life insurance proceeds (most cases)
- Workers’ compensation benefits
- Certain scholarships and fellowship grants are used for qualified education expenses
Why Gross Income Matters
Gross income is important because it’s the starting point for calculating:
- Adjusted Gross Income (AGI)
- Taxable income
- Eligibility for many tax credits and deductions
Even income that isn't taxed still has to be reported first as part of gross income.