Question

What is the difference between gross income and net income? Select the best answer
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 is wages, salaries and other earnings minus all tax and deductions
d) Wages minus voluntary deductions

Answer 1

The best answer is:
**c) Net income is wages, salaries and other earnings minus all tax and deductions**

This option correctly defines net income as the amount left after all taxes and deductions have been taken from gross income.