Annual rent

economic-dictionary

Annual income is the set of income that a natural person obtains over a year. This income is used to calculate the taxes you must pay in relation to that income.

When a person reaches adulthood, it is common for them to join a job, set up a company, invest in the stock market or start managing assets to obtain income, among many other options. These actions can lead the individual to generate income in a timely manner or with a certain frequency.

The total sum of the income that any citizen obtains throughout a year, after subtracting the deductible expenses, is known as the annual income. As we have seen, this income can come from different sources. However, they are added to obtain said amount.

The annual income is used by the Treasury of the country of residence of the citizen in question. This is to calculate the taxes that you must pay. Along with this, it is important to note that, generally, all income is not added together and a single tax rate is applied to them, but rather they are classified into different categories to be able to apply different tax rates.

Types of income from annual rent

The Tax Agency differentiates between the following types of income for the calculation of annual income:

  • Net income from work: It is the total income received by a person for doing their job. This, after subtracting the deductible expenses.
  • Net income from movable capital from savings: These are all those income from the sale of financial assets, collection of dividends or debt securities, among many others.
  • Net income from general movable capital: The origin of this income may be intellectual property, the provision of technical assistance or the leasing of movable property, among others.
  • Net income from economic activities: The income associated with this type is obtained through activities such as, for example, the liberal or sports professions.
  • Net income from real estate capital: It is the computation of all income from the lease of real estate.
  • Income allocations: These are the income obtained, for example, through urban real estate that meets certain requirements or from temporary unions of companies.
  • Capital gains and losses: Those variations in the value of the citizen's assets and that become evident with any alteration of the same.

Annual income example

Suppose we are a person who enjoys a permanent job throughout the year. For this work, we receive net returns equal to $ 12,000. Added to this, this year we have received $ 3,500 in dividends from a company in which we invest. We also have a property that has led us to generate $ 8,000 in net returns on real estate capital.

If we want to calculate our annual income, we must add the amounts mentioned above. Therefore, our annual rent will be $ 23,500.

In conclusion, the annual income is the sum of all the income that a person has received throughout a year. This, after subtracting those expenses considered as deductible.

Tags:  right history USA 

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