GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Taxable Income


Synonyms:dividends, interest, taxation, wages
Filed Under: financial-banking, taxation
Tags: banking, taxes
 

Definition of taxable income

taxable income
1. Adjusted gross income less itemized or standard deductions, less personal and dependent exemption amounts.

Related Terms and Acronyms:

  • audit   An examination of a taxpayer's income tax return or other transactions bearing tax consequences. Audits range from a simple letter from the agency to a detailed review of individual or business tax filings and records.
  • constructive receipt   The idea in which a taxpayer does not actually have to take possession of money for it to be taxable. An example of this is when savings account interest is reinvested rather than sent to the account holder as a separate payment. In this case, the account holder constructively received the interest because the earnings were credited to his account and could have been taken out at the owner's discretion. As such, the earnings are taxable.
  • garnishment   An amount withheld from your pay and remitted to another party, such as a creditor. You must include in your taxable income any amount that was garnished from your pay, because the full amount of your pay is considered to have been received by you even though some was withheld to pay your debts.
  • gross income   Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.
  • gross overtime   Overtime pay before taxes that is averaged over two years can be considered monthly income, but it must be over the two years or it does not count.
  • household income (HHI)   The total income of all members of a household.
  • investment income   Income that is earned from investments such as interest, dividends, and capital gains.
  • ordinary dividends   The distribution of a company's profits that are subject to full taxation.
  • ordinary income   Income that does not qualify as a capital gain including wages, interest, dividends, and net income from a business.
  • personal disposable income   Personal income minus personal income tax payments. Also called "take-home pay."

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