# Taxable Income

*Taxes — Finicade finance glossary*

Taxable income is what's left after every deduction you're entitled to, and it's the figure your tax brackets are actually applied to. It is usually far below gross pay: a US single filer earning $70,000 who takes only the standard deduction is taxed on roughly $55,000. Every deduction, retirement contribution and pre-tax benefit works by lowering this number, which is why two people with identical salaries can owe very different tax.

**Formula:** `Taxable income = Gross income − Adjustments − Deductions`

**Also known as:** taxable earnings

**Related terms:** [Adjusted Gross Income (AGI)](https://finicade.com/glossary/adjusted-gross-income), [Standard Deduction](https://finicade.com/glossary/standard-deduction), [Tax Bracket](https://finicade.com/glossary/tax-bracket), [Gross Income](https://finicade.com/glossary/gross-income), [Tax Deduction](https://finicade.com/glossary/tax-deduction)

Source: https://finicade.com/glossary/taxable-income