personal income

Examples of personal income in the following topics:

• Personal Income

  • Personal income is an individual's total earnings from wages, investment interest, and other sources.
  • In the United States the most widely cited personal income statistics are the Bureau of Economic Analysis's (BEA) personal income and the Census Bureau's per capita money income.
  • BEA's personal income measures the income received by persons from participation in production, from government and business transfers, and from holding interest-bearing securities and corporate stocks.
  • Personal income and disposable personal income are provided both as aggregate and as per capita statistics.
  • BEA produces monthly estimates of personal income for the nation, quarterly estimates of state personal income, and annual estimates of local-area personal income .

• Disposable Income

  • Disposable income is thus total personal income minus personal current taxes .
  • Discretionary income is disposable income minus all payments that are necessary to meet current bills.
  • It is total personal income after subtracting taxes and typical expenses (such as rent or mortgage, utilities, insurance, medical fees, transportation, property maintenance, child support, food and sundries, etc.) needed to maintain a certain standard of living.
  • Discretionary income = Gross income - taxes - all compelled payments (bills)
  • Disposable income is often incorrectly used to denote discretionary income.

• Income

  • Salary alone only measures the income from a person's occupation, while total personal income accounts for investments, inheritance, real estate gains, and other sources of wealth.
  • Many people who have vast accumulated wealth have virtually non-existent salaries, so total personal income is a better indicator of economic status.
  • However, in a dual-income household the combined income of both earners, even if they hold relatively low status jobs, can put the household in the upper middle class income bracket.
  • Personal income is an individual's total earnings from wages, investment interest, and other sources.
  • In the United States, the most widely cited personal income statistics are the Bureau of Economic Analysis's personal income and the Census Bureau's per capita money income.

• Federal Income Tax Rates

  • Individual income taxes often tax the total income of the individual, while corporate income taxes often tax net income.
  • Individuals may also deduct a personal allowance and certain personal expenses.
  • In order to help pay for the American Civil War, the federal government imposed its first personal income tax on August 5, 1861 as part of the Revenue Act of 1861.
  • The Court held that taxes on rents from real estate, interest income from personal property, and other income from personal property were treated as direct taxes on property, and had to be apportioned.
  • A self-employment tax in like amounts (totaling 15.3%, 13.3% for 2011 and 2012) is imposed on self-employed persons.

• Income Distribution

  • The distribution of income among the members of society, individuals and families, is called the personal distribution of income.
  • The personal distribution of income describes the allocation of income among economic agents.
  • Other social institutions such as welfare and philanthropy play a minor role in the personal distribution of income.
  • When considering income distribution by age of household, there is a "life cycle" of a person's earnings and needs that should be considered.
  • A "Lorenz Curve" can also describe the personal distribution of income.

• The Tariff

  • The United States Revenue Act of 1913 re-imposed the federal income tax, and lowered basic tariff rates from 40% to 25%.
  • He brought special attention to the matter by making his appeal before Congress in person.
  • ...the net income of a taxable person shall include gains, profits, and income derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid, or from professions, vocations, businesses, trade, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in real or personal property, also from interest, rent, dividends, securities, or the transaction of any lawful business carried on for gain or profit, or gains or profits and income derived from any source whatever
  • Under the Revenue Act, the incomes of couples exceeding $4,000, as well as those of single persons earning $3,000 or more, were subject to a one percent federal tax.
  • Furthermore, the measure provided a progressive tax structure, meaning that high income earners were required to pay higher rates.

• Consumption outcomes

  • Then, disposable income increases to 200 but only consumes 180.
  • These two conclusions imply that the gap between income and consumption at all high levels of income is too wide to be easily filled by investment.
  • Autonomous saving is how much a person saves when they have no disposable income, which means that the person is generally spending more than they bring in.
  • Y stands for disposable income.
  • As savings (S) increases as disposable income (Yd) increases.

• Tax Rate

  • In a tax system, the tax rate describes the ratio at which a business or person is taxed .
  • An income tax could have multiple statutory rates for different income levels, whereas a sales tax may have a flat statutory rate.
  • To calculate the average tax rate on an income tax, divide the total tax liability by the taxable income.
  • It may be calculated by noting how tax changes with changes in pre-tax income, rather than with taxable income.
  • In U.S. income tax law, the term is used in relation to determining whether a foreign income tax on specific types of income exceeds a certain percentage of U.S. tax that might apply on such income.

• Impact of Income on Consumer Choices

  • The simplest way to demonstrate the effects of income on overall consumer choice, from the viewpoint of Consumer Theory, is via an income-consumption curve for a normal good(see ).
  • The wealth effect differs slightly from the income effect.
  • For example, if a person owns a stock that appreciates in price, they perceive that they are wealthier and may spend more, even though they have not realized those gains so their income has not increased.
  • As income rises, the quantity consumed of 'X1' decreases.
  • This illustrates increased variance in consumer choice as income rises.

• S-Corporations (S-Corps)

  • Quarterly estimated taxes must be paid by the individual to avoid tax penalties, even if this income is "phantom income".
  • S status combines the legal environment of C corporations with partnership-like federal income taxation.
  • Certain corporate penalty taxes (e.g., accumulated earnings tax, personal holding company tax) and the alternative minimum tax do not apply to an S corporation.
  • Families, defined as individuals descended from a common ancestor, plus spouses and former spouses of either the common ancestor or anyone lineally descended from that person, are considered a single shareholder as long as any family member elects such treatment.
  • Shareholders must be U.S. citizens or residents and natural persons, so corporate shareholders and partnerships are generally excluded.