Chapter 4 w Solutions

Chapter 4 w Solutions - Burkett-Tax I—Chapter4...

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Unformatted text preview: Burkett-Tax I—Chapter4 Scholarship Example , Jay received an athletic scholarship to Small State University. Under the scholarship agreement, he received tuition ($4,500), books ($400), and room and board ($5,000). Exclusion? vugmm ’Qooicr" ‘ii’u: 'i' “iv 03 qfiq ‘30 ). Gross Income? 29m Qawfi “3% ‘19 S“: 000 f.— How is Jay’s standard deduction affected? (Chapter 1) $6,000 09>- é: CAN r; w”) s“ 'fimwfim $2M mm " » {QN- ‘3»; $3M. 3:? Q fidu as’fiaw' Burkett — Tax |- Chapter 4 Flexible Benefit Plan Aria works for Bond Corp. which allows her to contribute a maximum of $5,000 a year to a medical reimbursement plan. How does the following affect the income reported on her W-2? Her salary is $ 62,000 \ Aria contributes $2,000 Z 00‘) / - ' i 0. 00 I Net wage reported on her W-2 How do the following affect her Income? Reimbursement for qualified medical expenses $1,800 What is the balance in her account at the end Of the year? Com? , 2 (000 ‘ game {Lia} ‘ _ ‘2 00 Ta QM ch KLEQ (20 5) @QLRC‘QCQ‘, “5" Burkett —Tax |— Chapter 4 Disability/Flexible Benefit Plan Example Joe (25% MTR) has purchased a disability policy with after tax $ that will pay him a $500/month benefit if he becomes disabled. How much benefit would he have to purchase to receive an equivalent amount (ATE/After Tax Benefit) if he was to purchase disability coverage pre- tax through his companies flexible benefit plan? goo / '* m, Caém] jPQooFl \. I L x Ag La SZNCGMQ (a (9—7 TA» it Q 28””? (i o ‘3 3 Mg? A TAP; m_ Burkett — Tax | — Chapter 4 Health Savings Account (HSA) Aria works for Bond Corp. which has a high deductible health insurance plan (:$1,200). ' How do the following items affect her AGI? HSA Contributions V By Bond Corp $ 500 ‘9 Aria makes the maximum contribution? ’2 ‘3 S C) {733-570 5 Maximum for single taxpayer $ 2 , £0 For AGI Deduction ' I < $ 23.3“ How do the following affect her Income? Distribution for qualified medical expenses is $250 “'9' Earnings on her account of $18 What is the balance in her account at the end of the year? §0O A» ZSTO «Xv VB» *3 <3, 1919 How is this different than a flexible benefit plan? “res-1 ngce EN. Age ACCT" (24:; Lqu; “To “fix -. Burkett — Tax I — Chapter 4 CD vs. Bond Example Joe (25% MTR) is considering investing in a 5% Richland County bond. What rate would he have to receive on a bank CD to have an equivalent after tax return? €52 “4.2/33 :2. (ca/C77"? “mm get-am flame/sit (a. (:3 J2 NW“ (geflwm’ item» my fit); ...
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Chapter 4 w Solutions - Burkett-Tax I—Chapter4...

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