Takeaways
- Gross Income summarizes all your pre-tax earnings throughout the year.
- Gross Income is a barometer for your earnings power and savings potential.
- Gross Income is the starting point for calculating Adjusted Gross Income.
- Gross Income is also used to measure disposable and discretionary Income.
- Higher gross incomes allow you to save, invest, pay off debts, and grow your net worth.
What Is Gross Income?
Gross income is the total pre-tax income you make in the year. This includes all sources of earnings, including salaries, side hustles, bonuses, freelancing gigs, dividend income, and more. A gross income calculator can help you tally all your income sources.
According to recent data, the real median household income in the United States is $80,610.[1] Your gross income number is a proxy for where you stand relative to other earners your age.
You can quickly achieve your financial goals by boosting your gross income and decelerating spending. Get started with our plug-and-play gross income calculator below to understand how much you earned this year.
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Gross Income Calculator
This gross income calculator will help you tabulate your earnings. Make sure to include all sources of income to accurately reflect your total gross income.
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Gross Income Calculator
Annual Income Sources
Total Annual Gross Income
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How to Use This Calculator
Fill in the variables to the gross income calculator to simulate your expected annual gross income. Here's what to think through for each one:
- Salary: If you work a regular 9 to 5 job, you are probably quite familiar with your annual salary. You can find your salary in your payroll portal. Alternatively, check your offer letter if you have just started a new job.
- Bonuses: Part of many annual compensation packages is a cash bonus component. These payments can range from quarterly to yearly checks, depending on your position, tenure, and level within the company. Read more about the bonus tax rates.
- Wages or freelance income: You might moonlight to start your own business. Include any freelance income you make from side hustles. If you work multiple jobs, your wages from all companies matter.
- Dividend Payments: Fixed-income investors gravitate toward dividend-paying stocks. You must include this number and report it if you own stocks that have paid dividends throughout the year. You can find it on Form 1099-DIV.
- Interest Income: You might be a super saver who counts on interest income from a high-yield savings account or certificates of deposit. But don’t forget about any interest earned in your regular checking account, too.
- Rental Income: Real estate investing can come from owning rental properties, commercial buildings, or REITs. The income you receive from these properties is part of your gross income. Read about how to earn passive income.
- Capital Gains: Selling your house, stocks, bonds, or real estate can result in capital gains taxes. Read more about the capital gains tax rate.
- Other Income: This category serves as a catch-all. Comb through your bank account to ensure you have captured all income sources. Here are a couple that you might need to include:
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- Retirement withdrawals
- Annuities payments
- Inheritance payments
- Pension payments
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What Gross Income Helps Calculate
Gross income is the launch pad for many tax and personal finance terms. Here are several definitions derived from gross income:
- Adjusted Gross Income (AGI) is a tax metric used by the IRS to calculate annual income taxes. To get your AGI, you start with your gross income and subtract IRS-qualifying deductions and adjustments listed on Schedule 1 of Form 1040.[2] (Read more about Adjusted Gross Income).
- Modified Adjusted Gross Income (MAGI) is another tax term that helps determine what tax credits, tax deductions, and other benefits you might qualify for. (Read more about MAGI).
- Disposable Income is the amount of income you have after taxes. You can consider disposable income your take-home pay or personal net income. Disposable income is what is left when expenses are allocated to your budget. (Read more about Disposable Income).
- Discretionary Income is your disposable income minus your living necessities. Living expenses can include your rent or mortgage payment, minimum credit card bills, utilities, and groceries. (Read more about Discretionary Income).
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Where to Report Gross Income
You will need to include your gross income when you are filing your annual tax return. It is calculated on Form 1040, your individual tax return.
What If You Underreport Your Income?
If you underreport your gross income to the IRS, this could lead to errors in your tax liability or tax refund calculation, which in turn could result in IRS penalties and fines.
Employers, online brokerage accounts, banks, credit unions, and other financial institutions report your income to the IRS (based on your social security number). From there, the IRS will compare your annual filing to their records.
Using the best online tax software programs will help you pull in all your sources of income automatically.
Smart Summary
Gross income is the total amount of income you make annually. It includes everything from your salary to your annual bonus payment and rental property income. Knowing your gross income helps when filing your taxes and is a metric for your earnings power. By increasing your gross income and shedding expenses, you can reach your financial goals faster.
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(1) United States Census Bureau. Income in the United States: 2023. Last Accessed April 1, 2025.
(2) Internal Revenue Service. Definition of adjusted gross income. Last Accessed April 1, 2025.
