What is the difference between gross income and net income? Select the best answer.

Question

a. Gross income is the total of annual salary minus federal income tax

b. All wages and other earnings minus mandatory deductions

c. Net income in wages, salaries and other earnings minus all tax and deductions

d. Wages minus voluntary deductions

Answer 1

The best answer is:

c. Net income in wages, salaries and other earnings minus all tax and deductions.

This is because net income represents the amount of money an individual takes home after all taxes and deductions have been subtracted from their gross income, which is the total earnings before any deductions.