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It is opposed to net income, defined as the gross income minus taxes and other deductions (e.g., mandatory pension contributions). 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 ...
Section 61 of the Internal Revenue Code (IRC 61, 26 U.S.C. § 61) defines "gross income," the starting point for determining which items of income are taxable for federal income tax purposes in the United States. Section 61 states that "[e]xcept as otherwise provided in this subtitle, gross income means all income from whatever source derived
Definition of gross income (before deductions), including items specifically taxable 101–140: Specific exclusions from gross income 141–149: Private activity bonds 151–153: Personal exemptions; dependent defined 161–199: Deductions, including interest, taxes, losses, and business related items 211–224: Itemized deductions for ...
In accounting, revenue is a subsection of the equity section of the balance statement, since it increases equity. It is often referred to as the "top line" due to its position at the very top of the income statement. This is to be contrasted with the "bottom line" which denotes net income (gross revenues minus total expenses). [3]
There are certain advantages in tax planning when the cash method of accounting is used: for instance, payment of business expenses may be accelerated before year end, in order to maximize tax deductions, whereas billings for services may be postponed to after year end, so that payments won't be received until the new year, thus postponing tax ...
In accounting, the revenue recognition principle states that revenues are earned and recognized when they are realized or realizable, no matter when cash is received. It is a cornerstone of accrual accounting together with the matching principle .
The all events test is two-pronged concerning the recognition of income, three-pronged when dealing with deductions. It is met when (1) the right to income is fixed (recognition of income) or all events have occurred which establish the fact of liability (deduction), and (2) the amount thereof can be determined with reasonable accuracy. [3]
A Qualified Employee Discount is defined in Section 132(c) as any employee discount with respect to qualified property or services to the extent the discount does not exceed (a) the gross profit percentage of the price at which the property is being offered by the employer to customers, in the case of property, or (b) 20% of the price offered for services by the employer to customers, in the ...