Gross Income

Definition

  • Annual income including overtime that is regular or guaranteed. The income may be from one source or multiple sources. Salary is generally the principal source, but other income may qualify if it is significant and stable.

Synonyms
pre-tax income, total revenue, before-tax revenue, earnings, all income earned

Related Terms and Acronyms

  • Adjusted Gross Income (AGI)Acronym,
    • Before-tax Income Definition,
      • Earnings before income taxes are paid.
    • Constructive Receipt Definition,
      • The idea in which a taxpayer does not actually have to take possession of money for it to be taxable. An example of this is when savings account interest is reinvested rather than sent to the account holder as a separate payment. In this case, the account holder constructively received the interest because the earnings were credited to his account and could have been taken out at the owner's discretion. As such, the earnings are taxable.
    • Earned Income Definition,
      • Money earned through wages, salaries, tips, net earnings (if self-employed), and any other income received for work or personal services. Investment income, such as dividends and interest, is not counted as earned income.
    • Gross Overtime Definition,
      • Overtime pay before taxes that is averaged over two years can be considered monthly income, but it must be over the two years or it does not count.
    • Household Income (HHI) Acronym, Important,
      • The total income of all members of a household.
    • Modified Adjusted Gross Income (MAGI)Acronym,
      • Net Income (NI) Acronym, Very Important,
        • The difference between effective gross income and expenses. The term is qualified as net income before depreciation and debt.
      • Ordinary Income Definition,
        • Income that does not qualify as a capital gain including wages, interest, dividends, and net income from a business.
      • Other Income/Expenses Definition,
        • Any income or expenses earned or disbursed by a business that are not clearly associated to its core operations.
      • Personal Disposable Income Definition,
        • Personal income minus personal income tax payments. Also called "take-home pay."
      • Qualifying Ratios Definition,
        • As calculated by lenders, the percentage of income that is spent on housing debt and combined household debt. The first qualifying ratio, called the gross debt service or GDS is up to and including a maximum of 32% of the combined gross family income. The second qualifying ratio is the Total debt service or TDS is up to and including 40% of gross income.
      • Royalty Income Definition,
        • Payment for the use and exploitation of certain kinds of property, such as artistic or literary works, patents and mineral rights.
      • Taxable Income Definition,
        • Income that is subject to taxation after accounting for adjustments, exemptions, and deductions.
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