Taxable Income

Taxable income is any income that is subject to federal income tax, whether earned or unearned:

• Earned income is any income received for work, such as wages or business income
• Unearned income is any income produced by investments, such as interest on savings, dividends on stocks, or rental income

All taxable income must be reported on a tax return unless the amount is so small that the individual is not required to file a return. Earned and unearned taxable income is reported in the Income section of Form 1040; the total Income is entered on line 22 as total income.

Review the Volunteer Resource Guide (Tab D) for examples of taxable income.