The gross income of Maurice Vaughn is $785 per week. His deductions are $60.05, FICA tax; $90.33, income tax; 2% state tax; 1% city tax; and 3% retirement fund. What is his net income for one week?

Question

Question 1 options:

A)

$628.77

B)

$675.32

C)

$749.77

D)

$587.52

Answer 1

To calculate Maurice Vaughn's net income for one week, we first need to determine all the deductions based on his gross income and then subtract these deductions from the gross income.

1. Gross Income: $785.00

2. Fixed Deductions:

   • FICA tax: $60.05
   • Income tax: $90.33

3. Variable Deductions (based on gross income):

   • State tax: 2% of $785.00
   • City tax: 1% of $785.00
   • Retirement fund: 3% of $785.00

Calculating the variable deductions:

• State tax: \[ 0.02 \times 785 = 15.70 \]

• City tax: \[ 0.01 \times 785 = 7.85 \]

• Retirement fund: \[ 0.03 \times 785 = 23.55 \]

4. Total deductions: Now, we add all the deductions:

   \[ \text{Total deductions} = \text{FICA tax} + \text{Income tax} + \text{State tax} + \text{City tax} + \text{Retirement fund} \] \[ = 60.05 + 90.33 + 15.70 + 7.85 + 23.55 \] \[ = 197.48 \]

5. Net Income: Now, we calculate the net income:

   \[ \text{Net Income} = \text{Gross Income} - \text{Total Deductions} \] \[ = 785.00 - 197.48 \] \[ = 587.52 \]

So, Maurice Vaughn's net income for one week is $587.52.

The correct answer is D) $587.52.