• Taxable income is the portion of your gross income that the IRS considers taxable.
  • It consists of earned and unearned income.
  • Taxable income comes from compensations, businesses, partnerships and royalties, among others.
  • Taxable income is usually less than adjusted gross income due to deductions that reduce it.
  • You can start calculating your taxable income by determining your filing status and collecting documents relating to all sources of your income.