What is "taxable income"?

Taxable income is defined as the portion of income that is subject to income tax after accounting for any deductions, exemptions, and adjustments that apply. This means it includes an individual's total earnings from various sources, such as salary, wages, and bonuses, minus any allowable deductions such as retirement contributions, certain business expenses, and other tax-related deductions that reduce the overall taxable amount.

Understanding taxable income is crucial for determining how much a person owes in income tax. It specifically refers to the amount on which taxes are calculated, ensuring that only the necessary portions of income are taxed based on the individual's tax situation. This is why the correct answer emphasizes an employee's total earnings subject to income tax after recognizing deductions.

In contrast, other options do not accurately reflect this concept. For instance, total earnings before any deductions would encompass all income but does not account for deductions that may lower the taxable income. Only considering bonuses received is far too narrow and excludes other forms of income. Lastly, stating that all earnings received by the employee are taxable fails to consider the essential deductions and adjustments that influence the final taxable figure.