Taxable Income

You work for a big corporation, earning a salary. (You didn't like taking risk in life, so you're happy with the 8 grand a month in total gross salary you get paid.) That's $96k a year total, but you have a $5k matching 401(k) contribution option, of which you take full advantage...and you have a small home with $8k in mortgage interest payments. You also have $2k in deductible healthcare costs (sick mother). So that's $96k gross...then subtract $5k and $8k and $2k, or $15k total, such that you net $81k in taxable income. And it's on that amount that you pay your taxes, whatever they are.

That's it. Happy 27 years to retirement.