Question

Taxpayers who recover all or part of an item that they deducted or took a credit for in a prior year, must report the same amount as

Answer 1

It is ‘Taxable Income’.

Taxable income is the amount of income which a person owes to government in a given year.

It is basically the tax liability.

Taxable income is calculated on the basis of total or gross income. It is a tax paid not only on the salary, but also on the other forms of compensations like, bonuses, allowances, tips, commissions, etc.

Gifts, inheritance, child support payments, welfare benefits, etc are not included in the taxable income.

Answer 2

Taxpayers who recover all or part of an item that they deducted or took a credit for in a prior year, must report the same amount as taxable income.taxable income refers to the gross income or adjusted gross income. It is minus any deductions or exemptions allowed in that tax year. This income includes wages, salaries, bonuses and tips, as well as investment income and unearned income.