Worldwide Income

DEFINITION of 'Worldwide Income'

The aggregation of a taxpayer's domestic and foreign income. Worldwide income is income earned anywhere in the world and is used to determine taxable income. In the U.S., citizens and resident aliens are subject to tax on worldwide income.

BREAKING DOWN 'Worldwide Income'

The IRS demands to know about all of a taxpayer's worldwide income, taxable or otherwise. Money that is paid to U.S. citizens or resident aliens as wages, independent contractor payments or unearned income from pensions, rents, royalties and investments may all be subject to tax by the IRS. There are some exceptions for U.S. taxpayers who live abroad. See IRS Publication 525 for more information.