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Accounting & Tax vocabulary · Income & Corporate Tax

Income tax

Meaning in accounting & tax, with examples

nounCore term

In accounting & tax, income tax means: A tax on the income of individuals, such as salaries, rent, business profits and investment income, usually charged at rates that rise as income rises.

In Turkish: gelir vergisi

How it is used

Employers deduct income tax from salaries every month; self-employed people usually file an annual return. In the US, 'income tax' also covers company profits (corporate income tax).

Example sentences

  1. Income tax is deducted from her salary every month, so she doesn't have to file a return.

  2. Rental income above the exemption limit is subject to income tax.

Common collocations

  • pay income tax
  • income tax rate
  • income tax bracket
  • deduct income tax
  • withholding taxTax that the payer deducts from a payment, such as a salary, rent, dividend or freelance fee, and pays to the tax authority on behalf of the person being paid.
  • taxable incomeThe part of income on which tax is actually calculated, after allowed expenses, exemptions and allowances have been deducted from total income.
  • tax returnAn official form a taxpayer submits to the tax authority, reporting income, expenses or sales for a period and calculating the tax due.
  • corporate taxA tax on the taxable profits of companies, calculated on the profit for the year after allowed deductions and adjustments.
  • gross payAn employee's total earnings for a period before income tax, social security and other deductions are taken off.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Income & Corporate Tax

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This page explains English vocabulary for learners. It is not financial advice.