Question

Emily had an excellent year as a salesperson in 2015, earning $97,000. she paid $37,000 for necessities such as mortgage, food, and clothing. her state and federal income taxes totaled $24,000. what was her discretionary income?

Answer 1

Discretionary income is the amount of money remaining from her income after paying federal taxes, other mandatory charges, and necessary expenditures for living. In this situation, Emily is earning a gross income of $97,000. When you deduct her necessary expenditures for mortgage, food, and clothing in the amount of $37,000 and her federal income taxes in the amount of $24,000 from her gross income, you can get her discretionary income which is $36,000.