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.