What is income in economics?

Income is the money you receive in exchange for your labor or products. Income may have different definitions depending on the context—for example, taxation, financial accounting, or economic analysis.

What is income & why is it important?

Income is one of the most basic measures of economic activity. For individuals and companies, it measures the net gain of their revenues as a result of working or doing business. In public policy, income represents the basis for most forms of taxation.

What is taxable income?

Taxable income is the total of all income from all sources and in any form, minus any tax-exempt amounts or allowable deductions. This is the amount that is subject to income taxation. Which Categories of Income Are Tax-Exempt? Federal, state, and local tax laws specify certain categories of income that are not subject to income taxation.