Gross income (also known as Total Income) is the number that’s going to be on Line 22 of your 1040 tax return.
I suggest looking at a 1040 while I explain line by line what your gross income will include. The items in green apply to most of us millennials.
- Line 7) wages, salaries, tips, etc. (your employer(s) will send you a W-2 with all this information)
- Line 8) taxable interest (this includes stuff like the .01% interest that you get from your savings account!)
- Line 9) dividends (won’t really apply unless you have investments)
- Line 10) taxable refunds, credits, or offsets of state and local income taxes
- Line 11) alimony received (won’t really apply unless you’re divorced)
- Line 12) Schedule C net income or loss (won’t really apply unless you own your own business)
- Line 13) capital gain or loss (won’t really apply unless you have investments)
- Line 15 & 16) IRA distributions and pensions & annuities (won’t really apply unless you’re retired)
- Line 17) Schedule E income (won’t really apply unless you have income from a rental property, partnership, trust, etc.)
- Line 18) farm income or loss (won’t really apply unless you own an income producing farm)
- Line 19) unemployment compensation (won’t really apply unless you receive unemployment income from the government)
- Line 20) social security benefits (won’t really apply unless you’re retired or disabled and receiving income from our social security system)
- Line 21) other income (this is for all the other ways you might be getting income: winning the lotto, awards, 1099, gambling, jury duty, etc.)
Line 22 is all these items added together to make up your Total Income.
Next time I will cover what’s NOT included in your gross income. Also known as what ways can you receive money without having to pay taxes on it.