Knowing Your Income
How do I know what my income was?
To calculate your income, gather all the forms together. You've got your W-2, your wage report. You've got the 199 showing interest, dividends, etc. You've got any other sources of income. What's your total income? Add all those numbers up: that's the answer.
What does "income after taxes" mean?
Basically, when you are talking about income before taxes, we're talking about what was the income? You got a paycheck. Your boss gave you a paycheck and let's say you earned $500 a week. Well that $500 is income before taxes. What is it after taxes? After taxes is when they take money from your paycheck such as Social Security taxes, Medicare taxes, and federal and state income taxes. The bottom line, or your take home pay is more akin to after tax income. The other side is, looking at it when you're doing your tax return, you've got your total income. That's income before taxes. You complete the tax return. When it is all finished, you find out how many taxes you are going to have to pay to the government. When you subtract that from the income that you reported on the frontpage, you've got the income after taxes.
