Amber's employer, Lavender, Inc., uses a §
Chapter1: Federal Income Taxation—an Overview
Section: Chapter Questions
Problem 73TA
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B3.
Transcribed Image Text:Problem 9-32 (LO. 6)
Amber's employer, Lavender, Inc., uses a § 401(k) plan that permits salary deferral elections by its employees. Amber's
salary is $99,000, and her marginal tax rate is 24% and she is 42 years old.
a. What is the maximum amount Amber can elect for salary deferral treatment for 2022?
19,500 X
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A § 401(k) plan is offered by many businesses to provide retirement assets for their employees. The plans are popular and make up about 20
percent of all retirement assets. Both employers and employees can contribute to a § 401(k) plan.
b. If Amber elects salary deferral treatment for the above amount, how much can she save in Federal income taxes?
Her tax liability for 2022 would be reduced by $
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c. What is the recommended amount that Amber should elect as salary deferral treatment for 2022, considering only the Federal income
tax effects?
19,500 X.
4,680 X.
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