Deciphering Taxable Income: Understanding the Core Concept for Federal Tax Returns

Question: A taxpayer in the United States is preparing their federal tax return and needs to understand the concept of "taxable income." Which of the following best describes taxable income? a The income calculated after applying all tax credits to the gross income b The amount of income left after subtracting the standard deduction or itemized deductions from gross income c The total amount of taxes a person owes before any credits or deductions are applied d The total income a person earns in a year, including all wages, salaries, bonuses, and tips