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 ?
The maximum amount is limited, in the case of a single individual, to the individual's earned income for the year.
Her earned income plus $350 exceeds the standard deduction for the single filing status, however, so her standard deduction is limited to $6,300.
creator of TurboTax software and a member of the FreeFile Alliance, launched a free mobile app that calculates earned income tax credit eligibility on the spot.
State Earned Income Tax Credits: Nineteen states and the District of Columbia have Earned Income Tax Credits similar to the federal EITC that low-income working families can claim.
The Economic Growth and Tax Relief Reconciliation Act of 2001, the GW Bush administration's tax cut package, increased the beginning and ending amounts of the phase-out ranges for married taxpayers who filed a joint return and, among other provisions expanding the potential reach of EITC in general, excluded nontaxable employee compensation from the definition of earned income (Gale & Potter, 2002; Kiefer, D.
And although Sperling praises the Earned Income Tax Credit because it puts money in the hands of poor families that they can spend as they see fit, he is not averse to less flexible programs that offer specific services.
The average Kosovar man devotes 57 percent of his time to earned income activities (i.
By 2002, almost a quarter of all Chicago taxpayers got the earned income tax credit, compared with 17 percent in 1999, shows a Chicago Reporter analysis of Internal Revenue Service data.
In terms of asset allocation, Creuzot says, "Retired women need to structure a portfolio that allows them to replace their earned income and, at the same time, provides some growth because they could live another 20 to 30 years.
Many of their tax returns are complex, and the refunds are increasingly large because of the refundable earned income credit and child tax credit.
They had declared the shares they obtained to earn future capital gains as occasional income, rather than as earned income.
The Earned Income Tax Credit (EITC) has become one of the largest federal programmes targeted at increasing the resources available to low-income households.