Which describes an individual’s net income?(1 point)
Responses
all salaries
all salaries
all wages, salaries, and other earnings
all wages, salaries, and other earnings
all wages and other earnings minus FICA
all wages and other earnings minus FICA
all wages minus all taxes and deductions
all wages minus all taxes and deductions
Which are voluntary deductions? Select the two correct answers.(1 point)
Responses
health insurance
health insurance
FICA
FICA
delinquent child support
delinquent child support
retirement plan contribution
retirement plan contribution
Social Security
The correct response is:
all wages minus all taxes and deductions
The correct answer is: all wages minus all taxes and deductions.
To determine an individual's net income, you need to calculate their total wages and then subtract all taxes and deductions. Net income refers to the amount of money a person earns after all taxes, deductions, and other withholdings have been taken out.
To calculate net income, start by calculating the individual's total wages. This includes any regular salary, hourly wages, or other forms of earnings they receive from their job or other sources.
Next, deduct all taxes from the total wages. This includes federal, state, and local income taxes, as well as any other taxes such as property tax or sales tax.
Finally, subtract any other deductions from the remaining amount, such as contributions to retirement accounts, health insurance premiums, or any other mandatory withholdings.
The resulting amount will be the individual's net income, which represents the actual amount of money they have available for personal spending, savings, or other financial purposes.