# Calculate Sergio's Net Annual Income

## What is Sergio's net annual income before deductions?

a) $3,880.00

b) $1,249.29

c) $2,637.71

d) $1,226.24

## Answer:

The amount of money Sergio made for the year before deductions are taken out is **$19,738**.

To calculate Sergio's net annual income, we need to subtract the deductions and taxes from his gross annual income. The Social Security deduction is 6.2% of the gross annual income, Medicare is 1.45% of the gross annual income, and federal and state taxes are 15% of the gross annual income.

Using the formula:

- Calculate the Social Security deduction:
**Gross Annual Income * 6.2% = $19,738 * 6.2% = $1,226.24** - Calculate the Medicare deduction:
**Gross Annual Income * 1.45% = $19,738 * 1.45% = $286.01** - Calculate the total tax deduction:
**Gross Annual Income * 15% = $19,738 * 15% = $2,960.70** - Calculate the net annual income:
**Gross Annual Income - (Social Security Deduction + Medicare Deduction + Total Tax Deduction) = $19,738 - ($1,226.24 + $286.01 + $2,960.70) = $15,265.05**

Therefore, Sergio's net annual income before deductions is $15,265.05.