What is taxable income?

Taxable income is the income or money you receive in a year that is subject to tax. Taxable income includes money you earn from your job, investments, and business activities. It does not include money you receive as gifts, or money you make through activities like collecting unemployment benefits. In California, taxable income is reported on Form 540 and Form 540NR, which are used to report federal and state taxes respectively. Taxable income in California is subject to state, federal, and local income tax. Generally, taxable income is based on the total amount of money you made in the year minus allowable deductions and exemptions. Allowable deductions and exemptions reduce the amount of money subject to taxes. For example, in California, you can deduct your health care costs, retirement plan contributions, and some job-related expenses. You can also receive exemptions based on your age, marital status, and other circumstances. It is important to understand how taxable income is calculated and how deductions and exemptions can reduce your taxable income. It is also important to understand which types of income are taxable and which are not. To make sure you are correctly reporting your income, you should consult with a tax professional.

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What is taxable income?

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