Taxable Income Law and Legal Definition
Pursuant to 26 USCS § 63 [Title 26. Internal Revenue Code; Subtitle A. Income Taxes; Chapter 1. Normal Taxes and Surtaxes; Subchapter B. Computation of Taxable Income; Part I. Definition of Gross Income, Adjusted Gross Income, Taxable Income, Etc.],
“(a) In general. Except as provided in subsection (b), for purposes of this subtitle [26 USCS §§ 1 et seq.], the term "taxable income" means gross income minus the deductions allowed by this chapter [26 USCS §§ 1 et seq.] (other than the standard deduction).
(b) Individuals who do not itemize their deductions. In the case of an individual who does not elect to itemize his deductions for the taxable year, for purposes of this subtitle [26 USCS §§ 1 et seq.], the term "taxable income" means adjusted gross income, minus--
(1) the standard deduction, and
(2) the deduction for personal exemptions provided in section 151 [26 USCS § 151].”
