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Taxable income is the amount of money you earn during a year that is subject to taxes. It includes not only your salary or wages but also other types of income, like rental income, dividends, or profits from selling a property. To calculate your taxable income, you subtract certain allowed expenses and deductions from your total income.
For example, let's say you have a yearly salary of $60,000 and earn an additional $10,000 from renting out a property. Your total income would be $70,000. However, after subtracting eligible expenses and deductions, such as $5,000 for mortgage interest and $2,000 for property taxes, your taxable income would be $63,000.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
In the world of taxes, there's income, you see,
But taxable income's what matters to thee.
It's the money you earn, less deductions and more,
That determines the taxes you simply can't ignore.