Taxable income

When you work and earn money, the government needs some of that money to help pay for things like roads, schools, and hospitals. The amount of money that you have to give to the government is called “tax”.

Now, the money you earn is called “income”. Taxable income is the amount of money that the government has decided they need to take taxes from.

But not all of the money you earn is taxable. There are some things that you can do to reduce the amount of taxable income you have. For example, if you have to pay for things like school tuition or medical bills, you can subtract those amounts from your taxable income.

So, if you earned $1000 and had $100 in medical bills, your taxable income would be $900. You would only have to pay taxes on $900 instead of $1000.

It's important to understand taxable income because knowing it can help you understand how much tax you need to pay and how to reduce your taxes.