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1.8 Calculating Net Income Quiz 1. List and briefly explain the 3 major deductions every employee will see on their pay stub. (3 marks) 7/ethical '/41,./ /2,/,efrg7 A.:24(. 61:4,A6. Cd, /f .1.;I?1,

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How to fill out 8 calculating net income

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Step 1: Start by adding up all your sources of income. This can include wages, salaries, bonuses, tips, rental income, and any other form of income you receive.

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Step 2: Deduct any pre-tax deductions such as retirement contributions, health insurance premiums, and any other pre-tax deductions from your total income.

03

Step 3: Subtract your federal income tax, state income tax, and any other applicable taxes from the amount calculated in step 2.

04

Step 4: Deduct any post-tax deductions such as Social Security and Medicare taxes.

05

Step 5: Subtract any other expenses or deductions that are allowed by law, such as student loan interest or medical expenses.

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Step 6: Finally, you will be left with your net income, which is the amount of money you take home after all taxes and deductions.

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Step 7: Double-check your calculations and ensure all income and deductions are accounted for accurately.

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Step 8: If you are unsure about any part of the process, consult with a tax professional or use online tax calculators to assist you.

Who needs 8 calculating net income?

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Anyone who wants to calculate their net income for personal financial planning.

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Business owners who need to calculate their company's net income for financial analysis and decision-making.

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Employees who want to understand their take-home pay after taxes and deductions.

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