Are pensions considered as gross income?

Pensions are indeed considered part of gross income, making the answer correct. When a taxpayer receives pension payments, these funds are typically subject to federal income tax and must be reported as income on the tax return. This inclusion aligns with IRS guidelines that define gross income as all income received in the form of money, goods, property, and services that are not exempt from tax.

To elaborate, both government and private pensions are included in gross income, underlining why options that restrict this to only government or private pensions do not capture the full picture. Taxpayers must report the total amount they receive from their pensions, regardless of the source, ensuring that all such income is accounted for in their total gross income calculation.