Question

What is the adjustment to income or income after certain deductions also known as?

A.
tax-exempt income
B.
gross income
C.
tax-deferred income
D.
adjusted gross income
E.
net pay

Answer 1

D. adjusted gross income

Tax-exempt income is income you don't have to pay taxes on but doesn't account for the income you have to pay taxes on.

Gross income is all of your income without adjustments.

Tax-deferred income is income that you don't have to pay taxes on until a later date but, like tax-exempt income, doesn't account for the income you have to pay taxes on right away.

Net pay is the paycheck you receive after taxes are withheld from your salary.

Answer 2

E - Net Pay is the adjusted income after certain deductions (like taxes, insurance, retierment plans) have been taken out.

Gross income is the money BEFORE deductions are taken, net is after.