earned income


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Earned income

Compensation earned from employment, which includes wages, salary, tips, and compensation.

Earned Income

Income from salaries, wages, commissions, tips, bonuses, and any other source related to the work one does. Earned income specifically excludes income from investments. Earned income is taxed at one's regular income tax rate. See also: Marginal tax rate.

earned income

Individual income, such as commissions, salaries, and bonuses, that is derived as compensation for personal services. Compare unearned income.

Earned income.

Earned income is pay you receive for work you perform, and includes salaries, wages, tips, and professional fees.

Your earned income is included in your gross income, along with unearned income from interest, dividends, and capital gains. If you have earned income, you're eligible to contribute to an individual retirement account (IRA).

earned income

that part of a person's income earned from employment or self-employment (WAGES, SALARIES, FEES. COMMISSIONS and PROFITS). By contrast unearned income derives from the ownership of assets (interest and dividends from investment, rents from property, etc.) or can take the form of unemployment benefits, old age pensions, etc. See INCOME.

earned income

the return accruing to LABOUR for work done. The distinction between earned and unearned INCOME is made by the INLAND REVENUE for ease of assessment and collection of INCOME TAX. Earned income comprises WAGES, SALARIES, FEES, COMMISSION and PROFITS attributable to sole proprietors and partners within partnerships. Unearned income, by contrast, is primarily the return accruing to NATURAL RESOURCES and CAPITAL in the form of rental income, DIVIDENDS or INTEREST received. Earned income is generally taxed progressively, commencing with a tax-free income band and progressively increasing the rate of TAXATION in predetermined bands of income as income increases.

The distinction between earned and unearned income is not a valid one in economics as all FACTORS OF PRODUCTION can be said to ‘earn’ income. Even from the taxation authorities'view, the distinction has been controversial, the argument being put forward that unearned income is the result of investing from the SAVINGS of income previously earned. See INCIDENCE OF TAXATION, PROGRESSIVE TAXATION.

Earned Income

Earned income is income for services rendered as distinguished from income generated by property or other sources. Earned income includes amounts received as wages, tips, bonuses, other employee compensation, and self-employment income, whether in the form of money, services, or property. The definition of earned income is not the same for all income tax provisions. For example, alimony is treated as earned income only for purposes of determining how much an individual can contribute to an IRA.
References in periodicals archive ?
Even with added revenue from the taxation of most or all earned income, increasing longevity may push expenditures well beyond collected revenue.
The maximum amount is limited, in the case of a single individual, to the individual's earned income for the year.
Many eligible civilian clients of our overseas tax centers will often try to claim the valuable foreign earned income exclusion.
Her earned income plus $350 exceeds the standard deduction for the single filing status, however, so her standard deduction is limited to $6,300.
The cliff effect associated with the Earned Income Tax Credit is not, however, intended to measure income but to serve as a proxy for a taxpayer's level of assets: in 1995, Leslie Samuels, then-Assistant Secretary of Tax Policy for the Department of Treasury, testified to the House Ways and Means Committee that the cap on investment income comes from a belief that "it is inappropriate to provide the Earned Income Tax Credit to taxpayers with assets which can generate $1000 of investment income." (50) A taxpayer earning investment income is assumed to have assets that far exceed the value of the income generated from those assets.
Private sector firms such as Walmart, Intuit Inc., and the Computer & Communications Industry Association also help low-to-moderate income taxpayers file their taxes and claim the earned income tax credit for free.
Even if you are not required to file a federal tax return, you may want to file one if withholdings of tax have occurred, or you are eligible for a refundable credit, such as the Making Work Pay Credit or the Earned Income Credit.
If you have earned income from work, you may be able to take this credit.
Generally, for 2010, a dependent child must file a tax return if the child has unearned income of more than $950 or total gross income in excess of the standard deduction (the greater of (a) $950, or (b) earned income plus $300, but not exceeding $5,700).
Under the Economic Stimulus Act, some disability compensation and certain social security payments can be counted toward the qualifying income requirement of $3,000 for disabled veterans who did not have enough earned income to file a 2007 income tax return.
He credits his seemingly counterintuitive conclusions to "strong families, church attendance, earned income (as opposed to state-subsidized income), and the belief that individuals, not government, offer the best solution to social ills."
Rothschild states he "believes in taxing unearned income at higher rates than earned income." As a progressive, I find that statement poorly thought out.