Question

How does gross taxable income and adjusted gross income differ between the two?

Answer 1

Gross taxable income is the total income a person earns before any deductions or credits.

What is Tax?
Tax compliance refers to policy actions as well as individual behaviour aimed at ensuring that taxpayers pay the right amount of tax just at right time and securing the correct tax allowances as well as tax reliefs. A tax is a mandatory financial charge or another type of levy imposed on the a taxpayer by a governmental organisation in order to fund government spending as well as various public expenditures (regional, local, or national). Around 3000–2800 BC, the first recorded taxation was enacted in ancient Egypt. Non-compliance with the law includes failing to pay on time as well as evading or resisting taxation. Taxes can be paid in cash or in the labour equivalent and can be either direct or indirect.

Adjusted gross income is the amount of income a person earns after subtracting certain deductions that are allowed by the Internal Revenue Service, such as certain business expenses, student loan interest payments, or alimony payments. In other words, adjusted gross income is the amount of income that is actually taxable.

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