Income Taxes | Gross Income

Gross income is the total amount of money an individual or business earns before any deductions or taxes are taken out. Gross income includes all forms of earned income, such as salary, wages, tips, and bonuses, as well as unearned income, such as rental income, investment income, and dividends.

This video takes a visual approach to calculating gross income and the overall impacts to taxable income. Whether you are learning about taxes for your personal finances, or studying for the CPA exam, this course will break the concepts down, provide detailed examples and solutions, and allow you to understand the intuition behind the topics. This course covers everything from included wages and earnings, to taxable portfolio income, and self-employment income.

Additional nontaxable items covered include the following: 

Stock dividend - Stock dividends generally do not have any tax implications until the individual sells the shares of stock received. Therefore, only the basis of each share will change.

Stock split - Stock splits will not generate a taxable event. Instead, the individual’s receipt of stock will only evidence the same ownership interest in the corporation that issued the stock.

Return of capital - Return of capital is considered a non-taxable event and is not considered either a dividend or a capital gain distribution. The return of capital distribution will reduce the tax basis of an investment and can impact capital gains taxes when the investor eventually sells their shares of stock.