Question

Teresa is an unmarried dependent child who works part-time at the neighborhood doggy day care as a pet-sitter and dog walker, earning 4,200 in 2019. Teresa also received150 interest on her savings account. What is Teresa's earned income, and what is her gross income?

1) $4,200 earned income and $0 gross income
2) $4,350 earned income and $4,350 gross income
3) $4,200 earned income and $4,200 gross income
4) $4,200 earned income and $4,350 gross income
5) $4,350 earned income and $4,200 gross income

Answer 1

Teresa's earned income is $4,200 from her part-time job, and her gross income is $4,350, including the $150 interest from her savings account.

Step-by-step explanation:

Teresa's earned income is the income she received from her part-time job, which is $4,200. Earned income does not include passive income such as interest from savings accounts. Her gross income includes all her income before taxes and deductions, which would be the sum of her earned income and her interest income. Therefore, Teresa's gross income would be her earned income of $4,200 plus the $150 interest from her savings account, totaling $4,350. The correct answer is option 4) $4,200 earned income and $4,350 gross income.