Chapter 4 Fa 11

Chapter 4 Fa 11 - (ATB/After Tax Benefit) if he was to...

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Burkett – Tax I – Chapter 4 1 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? Gross Income? How is Jay’s standard deduction affected? (Chapter 1)
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Burkett – Tax I – Chapter 4 2 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 _________ 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?
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Burkett – Tax I – Chapter 4 3 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
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Unformatted text preview: (ATB/After Tax Benefit) if he was to purchase disability coverage pre-tax through his companies flexible benefit plan? Burkett Tax I Chapter 4 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 By Bond Corp $ 500 _________ Aria makes the maximum contribution? _______ _________ Maximum for single taxpayer $_______ F o r A G I D e d u c t i o n $ How do the following affect her Income? Distribution for qualified medical expenses is $250 _________ Earnings on her account of $18 _________ What is the balance in her account at the end of the year? How is this different than a flexible benefit plan? Burkett Tax I Chapter 4 5 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?...
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This note was uploaded on 02/22/2012 for the course ACCT 403 taught by Professor White during the Fall '11 term at South Carolina.

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Chapter 4 Fa 11 - (ATB/After Tax Benefit) if he was to...

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