Law & Legal & Attorney Tax Law

The Major Distinction Between a Deduction and Credit

Income

  • The Internal Revenue Service assesses taxes on your adjusted gross income. Courts define gross income as all accessions to wealth, clearly realized, over which the taxpayer has complete control. Wages, dividends, alimony, capital gains and rental income are common examples of income. Adjusted gross income is the amount of income left over after subtracting applicable deductions and using your exemptions.

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