If an individual makes $4,000 in salary per month and has a side job making $20 per hour for 10 hours a week for 4 weeks in a month, and they receive $1,000 per month in rent from a roommate, what is their gross income?(1 point)
Responses
$4,000
$4,000
$4,800
$4,800
$5,800
$5,800
Cannot be determined, because taxes and deductions are not provided
Cannot be determined, because taxes and deductions are not provided
To calculate the individual's gross income, we need to add up their salary, earnings from the side job, and rental income.
Salary per month = $4,000
Earnings from side job = $20/hour * 10 hours/week * 4 weeks = $800
Rental income = $1,000
Total gross income = $4,000 + $800 + $1,000 = $5,800
Therefore, the correct answer is $5,800.
What is a true statement about a 401k deduction?(1 point)
Responses
It is a contribution to the workers retirement account
It is a contribution to the workers retirement account
It is subtracted from the gross income resulting in lower taxes
It is subtracted from the gross income resulting in lower taxes
It is a mandatory deduction
It is a mandatory deduction
It is an involuntary deduction
It is an involuntary deduction
A and B
The correct answer is A and B.
A 401k deduction is a contribution made by the worker to their retirement account. This allows them to save money for their retirement.
Additionally, a 401k deduction is subtracted from the worker's gross income when calculating their taxable income. This lower taxable income can result in lower taxes.
What is defined as a “take-home pay”?(1 point)
Responses
Paystub
Paystub
Net income
Net income
Salary
Salary
Wages
Wages
The correct answer is "Net income."
"Take-home pay" refers to the amount of money an individual receives in their paycheck after all deductions, taxes, and withholdings have been taken out. It represents the actual amount of money they take home or receive in their bank account. Net income is the remaining amount of income after all deductions have been subtracted from the gross income.
Which is true of a flexible spending account but not a health savings account?(1 point)
Responses
If you change jobs, you keep the account and all the money in it.
If you change jobs, you keep the account and all the money in it.
You can use it to pay for doctor visits.
You can use it to pay for doctor visits.
You can get one only if you have a health insurance plan with a high deductible.
You can get one only if you have a health insurance plan with a high deductible.
If you don’t spend it within a certain period of time, part or all of it reverts to your employer.
The correct answer is: "If you don't spend it within a certain period of time, part or all of it reverts to your employer."
This statement is true for a flexible spending account (FSA) but not for a health savings account (HSA). With an FSA, there is typically a "use it or lose it" rule, which means that any funds remaining in the account at the end of the plan year or grace period may be forfeited by the employee and revert to the employer. This is not the case for an HSA, as the funds in an HSA roll over from year to year and can be retained by the account holder, even if they change jobs or no longer have a high deductible health insurance plan.
Which is true of a health savings account but not a flexible spending account?(1 point)
Responses
You can use it to pay for prescription medicines.
You can use it to pay for prescription medicines.
You can use it to pay for over-the-counter medicines.
You can use it to pay for over-the-counter medicines.
You must spend the money in it within a certain period of time.
You must spend the money in it within a certain period of time.
You can get the account only if you have a health insurance plan with a high deductible.
The correct answer is: "You can get the account only if you have a health insurance plan with a high deductible."
This statement is true for a health savings account (HSA) but not for a flexible spending account (FSA). HSAs are only available to individuals who have a high deductible health insurance plan. On the other hand, FSAs are not restricted to a specific type of health insurance plan. The other options listed (using the account for prescription medicines and over-the-counter medicines, and the requirement to spend the money within a certain time period) are applicable to both HSAs and FSAs.
Which of the following is true of Social Security but not Medicare?(1 point)
Responses
Money withheld from your paycheck is used to pay benefits to people who are collecting them now.
Money withheld from your paycheck is used to pay benefits to people who are collecting them now.
Participation in the program is mandatory.
Participation in the program is mandatory.
It provides benefits to people with disabilities.
It provides benefits to people with disabilities.
It pays benefits to retirees.
It pays benefits to retirees.