Difference In Gross, Net, and Taxable Income (Must Learn!)
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- Опубліковано 28 вер 2020
- It is really important to know the difference between gross income, net income, and taxable income. Understanding the difference between these three classifications can allow you to minimize your tax bill and maximize your take-home pay.
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#grossincome #netincome #taxableincome
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You made this super simple, thank you!
So glad I could help!
Great video! 🙌
Glad you liked it!
Filing a tax return for my Federal Taxation class as we speak. Thanks!
Sweet! Glad It Was Helpful!
Great video...especially the part on taxable income. That is always a fuzzy one for me. Maybe one day, you might have the time, to do a more in depth video on just that topic. Thank you, as always Zach, for all you do, for our financial health!🙂
Thank you so much! Can you be more specific on what you would like in a video? Do you mean on how to calculate taxable income?
@@OnCashFlow Yes...please. Plus some tips on how to have a lower taxable income whilst still maintaining a decent gross income. But if there isn't enough info for it's own video...I can look in past videos. Thanks Zach.
@@neosoul2010 By chance have you seen this video?
ua-cam.com/video/-dgXv8jf3io/v-deo.html
In it, I go over some ways you can make a high income and lower your taxable income. If you take the standard deduction then you are going to be utilizing "above the line" deductions to further reduce your taxable income.
@@OnCashFlow I have not seen that one yet. Definitely got to check it out. Thank you!😁
Question re 'Net Income' for budgeting purposes: It is so often called 'take-home pay' and I hear it explained as the amount "after everything else is taken out of your check." Yes, indeed there are deductions that come out of the check on my paystub, showing what has been substracted from my gross. HOWEVER, what about other IRAs I pay into, life insurances I pay premiums on, etc that ARE NOT CONNECTED with my employment that are paid for using my paycheck?? In my personal budget, should I ALSO subtract these others to arrive at my actual net??
If I am following you correctly I would only actually calculate my net income (or take home pay) based on things that are mandatory vs optional. If it's optional then you are choosing to spend money on it like life insurance, IRA contributions, etc. Hope this makes sense.
Thank you
You are very welcome! Thank you for watching!
Thanks
No problem
if i had a taxable income of $0 (after FEIE) but i sell stock (ISO), would i still have to pay capital gains?
Sorry, but this question is beyond my realm of knowledge on the subject. I would recommend you read IRS publication 54 Tax Guide for U.S. Citizens and Resident Aliens Abroad:
www.irs.gov/publications/p54
How can I locate the AGI information with out the paper work ?
Hmm. Go on the IRS website and request a "Tax Transcript" it will have your AGI.
Do you deduct gross income minus taxed income to get the companies net profit.
That's more of a corporate finance college question lol
If I made unemployment $14200 last year, so my taxable income is $14200~10200=$4000, right??
If you are single in 2020 and the only income you made was $14,200 of unemployment then theoretically you would take $14,200 - $12,400 (standard deduction) = $1,800 of taxable income. I hope this helps!
If I made unemployment $14200 last year, my taxable income is $14200-10200=$4000, right??
Please see the response on my other comment :)
Adjustable gross income is the income you receive after all federal and state taxes, thrift savings plan and insurances. Does this matter if i get extra money for housing? I'm so confused.
Sounds specifically like military/government? Well in the military your housing allowance is non-taxable and non-reportable as income. AGI (adjusted gross income) is simply your total income +/- your adjustments (tax form schedule 1). Take a look at the actual tax forms, it helps a lot to understand! :)
@@OnCashFlow i figured that out once I looked at my tax returns. Thanks for replying.
@@deegrant6426 Happy to help!
Thanks
If you make less than 75 percent of people in your city, taxes are the least of your worries, you worry more about survival. I think anyone who make less than 25k a year should not think about taxes.
It's true that if you make that much you will generally pay very little in income taxes, most likely the biggest tax at that point is property taxes and/or sales taxes! :O