Asked by Parker Daniell on May 16, 2024
Verified
Taxable income is:
A) total income excluding exempt items less deductions and exemptions.
B) gross income less deductions.
C) the sum of everything a person makes.
D) gross income less state taxes, mortgage interest, and charitable contributions.
Taxable Income
The amount of income used to calculate an individual's or a company's income tax due, typically gross income minus deductions and exemptions.
Exempt Items
Goods or services that are not subject to tax under specific tax laws or regulations.
Gross Income
The total income from all sources before any deductions or taxes are taken out.
- Distinguish between diverse line items on the income statement and their impacts on business outcomes.
Verified Answer
JD
Jevin DobbinsMay 21, 2024
Final Answer :
A
Explanation :
Taxable income is calculated by taking total income and subtracting any exempt items (such as gifts or inheritances) as well as applicable deductions and exemptions (such as those for dependents or charitable contributions). This leaves the amount of income that is subject to taxation.
Learning Objectives
- Distinguish between diverse line items on the income statement and their impacts on business outcomes.
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