Explanation:

Understanding gross income is essential for budgeting, tax planning, and financial management, both for individuals and businesses. It forms the basis for calculating taxable income and other financial assessments.

Practical Example of Gross Income:

An employee's annual salary is $60,000, with an additional $5,000 in bonuses and $2,000 in stock options. Their gross income for the year is $67,000 before any taxes or other deductions are applied.

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