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Gross Income
Definition
Total income from all sources before any deductions, taxes, or withholdings.
Explanation
Gross income includes wages, salaries, tips, interest, dividends, rental income, and all other earnings before deductions. It's the starting point for calculating your tax liability. For employees, gross income is shown on your W-2 and pay stubs.
Lenders also use gross income to calculate DTI ratios and borrowing capacity.
Example
An employee earning $60,000 salary with $2,000 in investment interest has a gross income of $62,000.