Our support webpage, TurboTax Real Money Talk Community, contains many different articles reflecting the most current changes in tax laws and requirements. For the letter you've received from the IRS about your health insurance, I'd like to share that this can differ for each individual depending on their specifics and you can learn more about.

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Your verified income is the foundation of your financial health. By looking at your verified income, Turbo can provide you with personalized recommendations and advice to help you realize your financial goals.

Lenders will typically verify your income from a number of
sources, including recent pay stubs, proof of income letters,
retirement benefits letters, bank statements, and
tax returns.
Turbo takes the income you reported on your tax return with
TurboTax to instantly show you your verified income. And if you
filed together with your spouse, only Turbo lets you see your
combined incomes on your Turbo dashboard.

We can help you with your IRS letter. You've received a notice from the IRS, and you're not sure what to do. We've got you covered. Not all IRS notices are audit-related. We'll help you find out why you were contacted and what you need to do next. But if you are audited, we can help with that, too. Buy used textbooks. Textbooks are a necessity, but buying them new is not. Buying used textbooks. Login to your TurboTax account to start, continue, or amend a tax return, get a copy of a past tax return, or check the e-file and tax refund status.

Tracking down tax statements and W-2s can be a hassle. Since Turbo
uses the income reported on your TurboTax return to verify your
income, it’s easy to get a clear understanding of your financial snapshot.
You can even use your Turbo verified income and tax data to pre-qualify
with select lenders and credit card providers within
our marketplace.

KNOWLEDGE IS POWER

Make the right financial moves

Your income and your debt both play crucial roles in where you stand financially. Lenders are
particularly interested in seeing that you have enough income after your expenses to take
on a loan.
Turbo brings together your verified income, credit score and debt-to-income ratio all in one place,
so you can clearly see the big picture and take control of
your financial life.

Can I see my verified income in Turbo if I didn’t file using TurboTax?

You can only see your actual IRS-verified income in Turbo if you filed your taxes with TurboTax. If you didn’t file using TurboTax, you can still use Turbo by self-reporting
your income.

Can I use Turbo even if I didn’t file
with TurboTax?

Yes. You don’t have to be a TurboTax customer
to use Turbo.

Is seeing my verified income in
Turbo free?

Yes, your IRS-verified income from your TurboTax return, debt-to-income ratio and credit score are all provided free
by Turbo.

I’m married, does my verified income include money my spouse makes?

In Turbo you have the option of seeing either your IRS-verified income from your TurboTax return or (with your spouse’s permission) seeing both of your combined incomes in your Turbo profile.

What if I have income from other sources besides my main job?

As long as it’s reported by you on your tax return you filed with TurboTax, it will show up as verified income in
your profile.

Whether you’re an employee or own a business, gross income and net income are important concepts to grasp. Understanding the difference will help you file your taxes as a wage earner, or understand the health of your company as a business owner.

They’re often confused, so we’ll breakdown the meaning of both concepts with examples to help you apply it to your finances.

What Is Gross Income?

As an employee, your gross income is the wage or salary that you earn before taxes and deductions are taken out of your paycheck. This is the pay that you accept in your job offer, thus, the total cost that your employer pays you for your position at the company. For example, if your job offer letter stated that you earn $71,000 annually, that is also considered your gross income.

Your gross income matters when you’re filing your federal and state tax return to help determine your deductions. If you apply for a loan, lenders will also look at a combination of your gross income and credit score to determine the amount that you qualify for.

Gross income takes on a different meaning for business owners, as it’s the revenue minus the costs of goods sold (COGS). This reveals how much the company has made off of its offerings after subtracting the costs required to provide the service or make the product.

For example, if your company revenue was $700,000 in 2018, but it costs $300,000 to provide your service or make the product, your gross income is $400,000.

What Is Net Income?

As an employee, your net income is important when it comes to managing your monthly budget — it’s the amount you see in your paycheck or your total take home pay once your taxes and deductions have been taken away. Typical deductions from your gross income include federal, state and local income tax, social security and medicare contributions, as well as your chosen pre-tax deductions for medical insurance, dental insurance and more.

For example, if your gross income is $71,000, but you have $21,000 in annual deductions, your net income is $50,000.

If you’re a business owner, your net income is the profit earned for the company after all taxes and expenses have been deducted from the revenue. For example, if you’re a retailer and sold 7,000 products at $100 each, your revenue is $700,000. If it cost you $250,000 to make the product, your gross income is $450,000. If your taxes and other expenses equate to $100,000, your net income is $350,000.

What Is the Difference Between Gross Income and Net Income?

If you’re an employee, gross income is your total income before deductions, while net income is your total take home pay after deductions.

If you’re a business owner, gross income is your revenue minus the cost of goods sold (COGS). Your net income is the profit earned for the company after all taxes and expenses have been deducted from the revenue.

How Is Calculating Your Gross Income and Net Income Useful?

Calculating your gross income and net income helps determine your financial health, and could help you determine as to what changes in your budget you should make in the following year.

If you’re an employer, you may want to see if you qualify for additional tax deductions, so your net income is higher next year. As a business owner, you might find that another manufacturer is less expensive, thus providing you with a higher net income.

Whatever your financial goals may be, understanding the difference between gross income and net income is the first step towards predicting your growth for next year.

Sources:Mint: Financial Jargon Decoded | Investor.gov: Net Income | Investopedia: Cost of Goods Sold

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