Income Tax Basis is the method used to determine an individual or business’s taxable income. It is based on the premise that all income earned in a given year must be accounted for and taxed accordingly. To calculate your total taxable income, you must take into consideration all forms of income received, including wages, salaries, investments, rent payments, or any other type of income that is subject to taxation. Once you have tallied up all sources of income, deduction amounts can then be subtracted from the total, resulting in your total taxable income which will be used to determine the amount of taxes owed. Income Tax Basis can be a daunting and complicated process but with a little research and planning, it does not have to be something to fear!