Which is an example of an income deduction?

a. an unexpected salary cut

b. wages lost due to illness

c. vacation budget

d. retirement savings

For purposes of taxation, only choice B (wages lost due to illness) is a valid income deduction. Unexpected salary cuts would reduce income, but this is reflected automatically by a company and would not have to be considered an income deduction. Sick days would have to be manually tracked before the income can be deducted.

Vacation budgets and retirement savings are an employee's own initiatives, and do not qualify as income deductions.

the correct answer is d. retirement savings--i just took the test.