A taxpayer's gross income is basically his or her income before any tax deductions are taken.  The gross income might include income from W-2's, self employment, capital gains, or anything of value received by a taxpayer that cannot be excluded as income.  From TITLE 26, Subtitle A, CHAPTER 1, Subchapter B, PART I, Sec. 61, Gross Income includes:

(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust.

Gross income can be viewed as a starting point as a way of determining a taxpayer's tax liability for a given tax year.  It is also  important for determining the AMT (Alternative Minimum Tax), which may affect some airline crewmember's with higher incomes and many itemized deductions.

Assuming a taxpayer is not affected by the AMT, Gross Income leads to adjusted gross income, adjusted gross income Leads to taxable income, and taxable income leads to a taxpayer's tax liablility as follows:

Gross Income - Above-the-Line Deductions = Adjustable Gross Income

Adjustable Gross Income - Below-the-Line Deductions = Taxable Income

Taxable income is used to determine tax liability by looking at the tax rate tables for a given tax bracket.