Income reporting refers to the process of documenting and disclosing all sources of income earned by an individual or business during a specific period. This information is typically compiled for tax purposes, ensuring that the correct amount of taxes is paid to the government. Common sources of income include wages, salaries, dividends, and rental income. Accurate income reporting is essential for maintaining financial transparency and compliance with laws. Individuals and businesses often use forms such as W-2 for employees or 1099 for independent contractors to report their earnings. Proper income reporting helps in assessing financial health and eligibility for loans or grants.