Gross income

Sum of all earnings before taxes
For households and individuals, gross income is the sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings, before any deductions or taxes. It is opposed to net income, defined as the gross income minus taxes and other deductions (e. g., mandatory pension contributions). For a firm, gross income (also gross profit, sales profit, or credit sales) is the difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxation, and interest payments. This is different from operating profit (earnings before interest and taxes). Gross margin is often used interchangeably with gross profit, but the terms are different. When speaking about a monetary amount, it is technically correct to use the term gross profit; when referring to a percentage or ratio, it is correct to use gross margin. In other words, gross margin is a percentage value, while gross profit is a monetary value.

In United States income tax law, gross income serves as the starting point for determining Federal and state income tax of individuals, corporations, estates and trusts, whether resident or non resident. Under the U. S. Internal Revenue Code, "Except as otherwise provided" by law, gross income means "all income from whatever source derived," and is not limited to cash received. Federal tax regulations interpret this general rule. The amount of income recognized is generally the value received or the value which the taxpayer has a right to receive. Certain types of income are specifically excluded from gross income for tax purposes. The time at which gross income becomes taxable is determined under Federal tax rules, which differ in some cases from financial accounting rules.

United States persons (including citizens, residents (whether U. S. citizens or aliens residing in the United States), and U. S. corporations) are generally subject to U. S. federal income tax on their worldwide income. Nonresident aliens are subject to U. S. federal income tax only on income from a U. S. business and certain income from United States sources. Source of income is determined based on the type of income. The source of compensation income is the place where the services giving rise to the income were performed. The source of certain income, such as dividends and interest, is based on location of the residence of the payor. The source of income from property is based on the location where the property is used. Significant additional rules apply.

Nonresident aliens are subject to regular income tax on income from a U. S. business or for services performed in the United States. Nonresident aliens are subject to a flat rate of U. S. income tax on certain enumerated types of U. S. source income, generally collected as a withholding tax. The rate of tax is 30% of the gross income, unless reduced by a tax treaty. Nonresident aliens are subject to U. S. federal income tax on some, but not all capital gains. Wages may be treated as effectively connected income, or may be subject to the flat 30% tax, depending on the facts and circumstances.