Fill in the blanks: _______ income is your earnings after _______.

The phrase "Net income is your earnings after taxes and withholdings" accurately reflects the definition of net income in personal finance. Net income represents the amount of money an individual retains after all deductions have been made from their gross earnings. These deductions typically include taxes imposed by federal, state, and local authorities, as well as other withholdings such as Social Security and Medicare contributions.

Understanding this concept is essential for effective financial planning, as net income is the actual amount available to spend, save, or invest. It often dictates budgeting strategies, lifestyle choices, and long-term financial goals. When individuals assess their financial health or make decisions regarding expenditures, it is net income they consider rather than gross income, which can paint an overly optimistic picture by not accounting for mandatory deductions.

The other options do not accurately describe the financial concept. For example, gross income does not incorporate the necessary withholdings, thereby failing to illustrate what an individual actually takes home. Similarly, referencing income without specifying the deductions also fails to convey a clear understanding.