What does gross income include?

Gross income encompasses all income received from various sources, which includes wages, dividends, capital gains, business income, and any other type of income without regard to its origin or whether it has been excluded from taxation in specific circumstances. This broad definition aligns with the Internal Revenue Code, where gross income is generally defined as all income from whatever source derived, unless specifically excluded by law.

The other options are narrower in focus or incorrect in interpretation. For example, income excluded by the IRS would not be considered part of gross income, making the first option incorrect. The second option, which mentions only earned income, limits gross income to income derived from employment or business activities and ignores other sources of income. The third choice restricts gross income to cash receipts only, which is misleading because gross income can also include non-cash items such as property or benefits. Therefore, understanding that gross income includes income from all sources allows taxpayers to accurately assess their overall financial picture for tax purposes.