Question

your paycheck shows the amount of tax ____________ that has been taken out of your earnings.

refunds

deductions

pay

contributions

billy’s retirement contribution is a(n) ____________, so it is not included in his taxable income.

withholding

deduction

refund

income tax

Explanation:

First Question:

• "refunds" are money returned (e.g., tax refund), not what's taken out of earnings.
• "deductions" refer to amounts subtracted (like tax deductions) from earnings, matching the context of tax taken out.
• "pay" is the earnings themselves, not what's taken out.
• "contributions" are voluntary payments, not typically tax - related deductions from earnings.

• "withholding" is tax taken out during payment, not related to retirement contributions' tax - free status.
• "deduction" means an amount subtracted (retirement contributions are tax - deductible, so not in taxable income).
• "refund" is money returned, not related to excluding from taxable income.
• "income tax" is a tax type, not what excludes contributions from taxable income.

Answer:

B. deductions

Second Question: