What Is Gross Income?

Key Points

Gross income includes all earnings pre-tax, such as wages, dividends, and rental income.
Adjusted gross income (AGI) is gross income minus specific deductions like retirement contributions.
Taxable income is AGI minus all other tax deductions, used by IRS to calculate owed taxes.

There are several different types of income -- in the eyes of the IRS, at least. One important concept all U.S. taxpayers should be aware of is the difference between gross income, adjusted gross income, and net income.

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Net Income

Revenue minus all expenses.

In this article, we'll look at gross income in particular, discuss how it differs from those other two income metrics, and explain why your gross income is important to know.

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Hands pulling a paycheck out of an envelope. — Image source: Getty Images.

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How to Calculate Tax on W-9 Income

Form W-9 doesn't usually result in income taxes withheld, but there is an exception.

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Employers often offer both plans for you to choose from. Here's how to do it.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

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