Which term refers to the amount of money you receive after taxes?

Which term refers to the amount of money you receive after taxes?

• A. Gross income
• B. Net income
• C. Discretionary income
• D. Taxable income

Answer: (B)

The term that refers to the amount of money you receive after taxes is net income. This figure represents your total earnings after all deductions, including income taxes, have been subtracted. It is essentially the "take-home" pay that you can use for your expenses, savings, and investments. In contrast, gross income is your total earnings before any deductions are made, including taxes. Discretionary income refers to the portion of your income that remains after essential expenses, such as housing and food, have been paid. Lastly, taxable income represents the portion of your income that is subject to taxation after accounting for deductions and exemptions; it does not reflect what you ultimately receive post-tax. Understanding these distinctions is crucial for effective personal finance management.

The term that refers to the amount of money you receive after taxes is net income. This figure represents your total earnings after all deductions, including income taxes, have been subtracted. It is essentially the "take-home" pay that you can use for your expenses, savings, and investments.

In contrast, gross income is your total earnings before any deductions are made, including taxes. Discretionary income refers to the portion of your income that remains after essential expenses, such as housing and food, have been paid. Lastly, taxable income represents the portion of your income that is subject to taxation after accounting for deductions and exemptions; it does not reflect what you ultimately receive post-tax. Understanding these distinctions is crucial for effective personal finance management.