Generally, it includes some or all items of income and is reduced by expenses and other deductions.
[2] The amounts included as income, expenses, and other deductions vary by country or system.
Taxable income may refer to the income of any taxpayer, including individuals and corporations, as well as entities that themselves do not pay tax, such as partnerships, in which case it may be called “net profit”.
[6] Such outlays may include personal expenses, such as a home mortgage interest deduction, and vary widely by jurisdiction.
In addition, many systems only levy taxes on earnings above an income tax threshold, allow deductions for personal allowances or a minimum deemed amount of personal deductions.