What is Ordinary Income? Ordinary income refers to the regular income that individuals or businesses earn through their everyday activities. It includes wages, salaries, commissions, bonuses, tips, and self-employment income. Ordinary income is different from capital gains, which are the profits made from the sale of investments or assets. Ordinary … …
What is Levy? Levy is a term used in economics to describe a type of tax imposed on individuals or entities based on their income or profits. It is a form of government revenue collection that helps fund public services and programs. Definition Levy refers to the act of imposing … …
Benefits of Land Value Tax The implementation of a Land Value Tax (LVT) system can provide numerous benefits for both individuals and society as a whole. Here are some of the key advantages of implementing LVT: 1. Fairness and Equity: One of the primary benefits of LVT is its ability … …
Types of Income 1. Earned Income Earned income refers to the money you receive in exchange for your labor or services. This includes salaries, wages, bonuses, commissions, and tips. It is the most common type of income for individuals who are employed. 2. Passive Income Passive income is the money … …
Definition of Exempt Income Exempt income refers to the portion of an individual’s income that is not subject to taxation by the government. It is a category of income that is excluded from the calculation of taxable income, resulting in a lower tax liability for the individual. There are various … …
What is Earned Income? Earned income refers to the money that an individual receives for their work or services rendered. It includes wages, salaries, tips, and self-employment income. Earned income is different from unearned income, which includes income from investments, rental properties, and other passive sources. Earned income can come … …
What is After-Tax Income? After-tax income refers to the amount of money an individual or household has left over after taxes and other deductions have been taken out of their gross income. It is the actual amount of money that is available for spending, saving, or investing. When a person … …
What is Adjusted Gross Income (AGI)? Adjusted Gross Income (AGI) is a term used in the United States tax system to determine an individual’s taxable income. It is an important concept that affects various aspects of a person’s tax obligations and eligibility for certain deductions and credits. Definition Adjusted Gross … …
What are Qualified Adoption Expenses? Qualified Adoption Expenses (QAE) refer to the necessary expenses incurred by individuals or couples during the adoption process. These expenses are eligible for certain tax benefits and deductions, making them an important consideration for those looking to adopt. QAE can include a wide range of … …
Pretax Earnings: Definition, Use, Calculation, and Example Pretax earnings are calculated by subtracting all the expenses, including operating expenses, cost of goods sold, depreciation, and amortization, from the total revenue generated by a company. This calculation gives a clear picture of the company’s ability to generate profit from its core … …
Gift Tax Explained: What It Is and How Much You Can Gift Tax-Free Gift tax is a tax imposed on the transfer of property or money from one person to another without receiving anything in return. It is important to understand the rules and regulations surrounding gift tax in order … …
What is Modified Adjusted Gross Income (MAGI)? Modified Adjusted Gross Income (MAGI) is a term used in the United States tax system to determine eligibility for certain tax benefits and subsidies. It is an important calculation that takes into account various sources of income and deductions to arrive at a … …
Annualized Income: Definition, Formula, and Example Annualized income refers to the projected or estimated income for a given period, typically a year. It is a method used to calculate the total income for a shorter period and then extrapolate it to an annual figure. This is particularly useful when dealing … …
What is the Annualized Income Installment Method? The Annualized Income Installment Method is a tax calculation method used by individuals and businesses to determine their estimated tax payments throughout the year. It is particularly useful for those whose income is not evenly distributed throughout the year, such as freelancers, self-employed … …