Tyler was excited, he finally graduated from MCC and landed a full time job at the local credit union. He had plans to buy a new car, rent a large apartment where he and his friends could hang out, and enjoy eating at his favorite restaurants.

Tyler started shopping around and found the car he wanted to buy. He also found a great, new apartment building where he would be the first tenant to live in the available apartment. He told the dealership and the apartment manager he would have down payment money on Friday, his first payday. When payday arrived Tyler checked his bank account and saw his paycheck had been deposited but was disappointed in the amount. He did not have enough to pay for both the apartment and the car. Based on his salary he expected the amount to be much higher. Where did the money go?

1.a. Define for Tyler the difference between gross pay and net pay.

b.Why does this difference matter to Tyler?

2.a. What required taxes could have contributed to Tyler’s disappointment?

b.List examples of optional deductions that may have cut into Tyler’s take-home pay.

3.What is disposable income? (Disposable income is not the same as discretionary income)

4.If Tyler\'s income taxes increase by 10% will his disposable income increase or decrease?

5.Each year Americans celebrate “Tax Freedom Day,” the date on which the average taxpayer has paid off his or her taxes for the year. Use the Internet to research the concept of Tax Freedom Day. (Hint: use the keywords “tax freedom day” in your browser.) When is tax freedom day this year?

Answer rating: 100% (QA)

Question 1 a Gross pay refers to the total amount of money an employee gets before taxes and other statutory deductions Preciselyit is the advertised ... View the full answer