Gross vs. Net Income (Q Mac)
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rcarellano
Member ✭
Have the budget tool understand gross vs. net and use net income amounts to develop a budget.
To better track and prepare for my taxes I use the Paycheck category but I capture my Gross Income off my pay statement. Then I subtract by adding a category for each deduction (i.e., Federal Tax, Soc Sec, etc.). When I budget I have a set amount I live with, and I set it. But since my Paycheck has the gross amount it always looks like I’m putting more into my budget then I really am.
To better track and prepare for my taxes I use the Paycheck category but I capture my Gross Income off my pay statement. Then I subtract by adding a category for each deduction (i.e., Federal Tax, Soc Sec, etc.). When I budget I have a set amount I live with, and I set it. But since my Paycheck has the gross amount it always looks like I’m putting more into my budget then I really am.
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You may appear to have more income when you record your Gross Income, but you also have more expenses when you track your itemized deductions in addition to your spending categories. Bottomline is what counts: How much is left over to spend?
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