Q:

Is total income based on gross or net amounts?

A:

Quick Answer

Total income is based on gross amounts. Total income is a term used by the IRS to describe all of a person's income, both earned and unearned.

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Is total income based on gross or net amounts?
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Full Answer

Total income includes all income sources before adjustments, exemptions or personal deductions. The total income amount is considered before any taxes are paid. To calculate total income, combine all sources of revenue including cash, checks, and credit card charges, losses such as damages and debts, as well as any interest or dividends.Net income is the amount calculated by removing taxes and other deductions from the gross income amount, and hence differs from total income.

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