Which of the following is considered taxable income?

Wages received from employment represent taxable income because they are compensation for services rendered. The Internal Revenue Service (IRS) classifies any income earned in exchange for labor or services as taxable, which includes salaries, hourly wages, and bonuses. This income is subject to income tax, Social Security tax, and Medicare tax, making it an essential component of an individual's taxable income.

In contrast, Social Security benefits may be partially taxable depending on the recipient’s total income level, while gifts received from family and life insurance payouts are typically not subject to income tax. Gifts are generally excluded from taxable income, and life insurance payouts to beneficiaries are considered non-taxable even though they may provide financial support.