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For a business, gross income (also gross profit, sales profit, or credit sales) is the difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxation, and interest payments. This is different from operating profit (earnings before interest and taxes). [1]
Gross income measures the profit generated from sales alone, using your total revenue minus the cost to of the goods you sold. Find out how net come is different. Gross vs. Net Income ...
Gross Income vs. Adjusted Gross Income. Adjusted gross income, or AGI, is defined as total income minus deductions, or other adjustments to your income that you are eligible to take. It starts out ...
Gross Income vs. Annual Income Gross income is the amount of money you earn before taking out deductions. If you’re employed by someone else, your gross income is equal to your salary or wages.
Where applicable, the cost of goods sold or cost of operations figure is subtracted from the gross income to yield the gross profit. All expenses other than the COGS or COO are subsequently subtracted from the gross profit to yield the profit or income – or, if a negative number, the net loss (usually written in parentheses).
Often, the term income is substituted for net income, yet this is not preferred due to the possible ambiguity. Net income is informally called the bottom line because it is typically found on the last line of a company's income statement (a related term is top line , meaning revenue , which forms the first line of the account statement).
Discretionary income is often defined as gross income minus taxes and other deductions (e.g., mandatory pension contributions), and is widely used as a basis to compare the welfare of taxpayers. In the field of public economics , the concept may comprise the accumulation of both monetary and non-monetary consumption ability, with the former ...
Adjusted gross income is an important number used to determine how much you owe in taxes. It's a factor in determining your federal tax bracket and taxable income -- the portion of your income ...