Eli5: why when asked for income info. are you asked for gross-income instead of net-income?

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Why not net income when you are certainly taking home less than you earned after taxes that are mandatory? Then when you include health insurance it’s much less.

Edit:Typo

In: Economics

5 Answers

Anonymous 0 Comments

Net income varies based on state and local tax rates you happen to reside in, federal deductions and credits, withholding a for health insurance and retirement plans, etc. so they aren’t apples-to-apples comparisons. It’s also easier to manipulate gross by, say stopping all 401k withholdings, temporarily. Or people might just report their take home pay without trying up the figure to any end of year taxes owed or refund.

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