What Is Taxable Income?
Taxable income is the portion of income on which income tax is actually calculated, after subtracting deductions and certain exclusions from gross income. In the United States it is generally adjusted gross income minus either the standard deduction or itemized deductions.
Taxable Income vs. Gross Income
Gross income is total income before anything is subtracted. Taxable income is what remains after allowed adjustments and deductions, so it is usually lower.
Example
A single filer with 70,000 of income and no other adjustments who takes a 15,000 standard deduction would have taxable income of 55,000. The actual deduction amount changes yearly.
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🔗 Related Terms
More Taxes Terms
- Additional Medicare Tax
- Adjusted Gross Income (AGI)
- Alternative Minimum Tax (AMT)
- Capital Gains Tax
- Capital Loss
- Child Tax Credit
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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.