which of the following is true about gross income?
it is a person's income before taxes and deductions
it is a person's income after taxes and deductions
it is a person's combined income after taxes and deductions
it is a person's estimated income before taxes and deductions
it is a person's income before taxes and deductions
The true statement about gross income is:
It is a person's income before taxes and deductions.
The correct answer is: "it is a person's income before taxes and deductions."
To determine the correct answer, we need to understand the definition and components of gross income.
Gross income refers to the total income earned by an individual before any taxes or deductions are taken out. It includes all sources of income, such as wages, salaries, tips, commissions, rental income, and dividends. Gross income gives a comprehensive picture of an individual's total earnings before any adjustments.
It is important to note that gross income does not take into account any taxes, such as federal income tax or state income tax, or any deductions such as Social Security, Medicare, or contributions to retirement plans. These taxes and deductions are applied to gross income to determine the individual's net income or take-home pay.
Therefore, the correct answer is that gross income is a person's income before taxes and deductions.