| Investment Dictionary: Unearned Income |
Any income that comes from investments and other sources unrelated to employment services.
Investopedia Says:
Examples of unearned income include interest from a savings account, bond interest, tips, alimony, and dividends from stock. As long as this income is "realized" then it is taxable.
| 5min Related Video: Unearned income |
| Financial & Investment Dictionary: Unearned Income (Revenue) |
Accounting: income received but not yet earned, such as rent received in advance or other advances from customers. Unearned income is usually classified as a Current Liability on a company's Balance Sheet assuming that it will be credited to income within the normal accounting cycle. See also Deferred Charge.
Income taxes: income from sources other than wages, salaries, tips, and other employee compensation-for example, Dividends, Interest, rent.
| WordNet: unearned income |
The noun has 2 meanings:
Meaning #1:
(taxes) personal income that you did not earn (e.g., dividends or interest or rent income)
Synonym: unearned revenue
Meaning #2:
(accounting) income received but not yet earned (usually considered a current liability on a company's balance sheet)
Synonym: unearned revenue
| Wikipedia: Unearned income |
 |
This article or section has multiple issues. Please help improve the article or discuss these issues on the talk page.
|
Unearned income refers to income that is not a wage.
It includes interest, dividends or realized capital gains from investments, rent from land or property ownership, and any other income that does not derive from work.
Unearned income has often been treated differently for tax purposes than earned income, in order to redistribute income or to recognize its qualitative difference from income derived from work. Such a tax structure is most often associated with a progressive income tax structure.
In recent times the pendulum has swung the other way, and most western countries tax unearned income more favourably than income from work.
Some economists claim that unearned income is compensation for deferring consumption, freeing up those resources to be invested in improving the future, by funding research and development of new technologies and services, capital equipment and education to improve the productivity of labor and so forth. This view also holds that unearned income provides an incentive to save, and capital markets facilitate allocation of resources to those enterprises which will provide the best economic benefit. Extra taxes on unearned income can interfere with these mechanisms. This point of view also asserts that all income is ultimately earned, and ask why tax should be higher on work that was done 100 years ago than work that is done today.
Other economists point to the allocational efficiency implications of earned versus unearned income and regard differential treatment of income from different sources for income tax purposes as a legitimate object of public policy.
 |
This economics or finance-related article is a stub. You can help Wikipedia by expanding it. |
This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)
 | unearned |
| Kiddie Tax (business term) |
| Unearned Discount (finance term) |
 | How much unearned income is not taxed? |
| What is the journal entry for unearned income? |
| Is unearned income eligible for income averaging on income tax filing? |
Copyrights:
 |
 | Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved. Read more |
 |
| Financial & Investment Dictionary. Dictionary of Finance and Investment Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved. Read more |
 |
| WordNet. WordNet 1.7.1 Copyright © 2001 by Princeton University. All rights reserved. Read more |
 |
| Wikipedia. This article is licensed under the Creative Commons Attribution/Share-Alike License. It uses material from the Wikipedia article "Unearned income". Read more |
Mentioned in
