Financial Literacy

What does the term "income" refer to?

• A.

  Money that is borrowed from a bank

• B.

  Money that is earned from working

What does the term "deduction" refer to?

• A.

  Money that is taken out of your gross income

• B.

  Money that is added to your gross income

What does "gross income" refer to?

• A.

  The amount of money earned after taxes

• B.

  The amount of money earned before taxes

What is "net income" ?

• A.

  The total amount of money spent

• B.

  Money made after deductions are taken out

What is the gross income in the example of net pay calculation?

• $2,418

• $39,000

How much is deducted for Social Security tax in the example provided?

• $2,418

• $1,800

What is the net income after all deductions in the example of net pay calculation?

• $30,832.50

• $39,000

What is income tax?

• A.

  Money paid to the government based on money you earn

• B.

  A fee for using public transportation

What is payroll tax?

• C) A tax paid directly to the government by the employee

• B) Money that your job holds from your paycheck

Which taxes are included in payroll tax?

• A.

  Social Security and Medicare taxes (FICA)

• B.

  Income and property taxes