eBook Chapter 14 Financial Planning Exercise 7 Effective after-tax cost of 401(k) contribution Luis Gomez is an operations manager for a large manufacturer. He earned $69,500 in 2018 and plans to contribute the maximum allowed to the firm's 401(k) plan. Assuming that Luis is in the 25 percent tax bracket, calculate his taxable income and the amount of his tax savings. Assume an individual employee can put as much as $18,500 into a tax-deferred 401(k) plan. The standard deduction for 2018 is $12,000. If necessary, round the answer for tax savings to the nearest cent. Taxable income $ Amount of his tax savings $ How much did it actually cost Luis on an after-tax basis to make this retirement plan contribution? If necessary, round the answer to the nearest cent. $

eBook Chapter 14 Financial Planning Exercise 7 Effective after-tax cost of 401(k) contribution Luis Gomez is an operations manager for a large manufacturer. He earned $69,500 in 2018 and plans to contribute the maximum allowed to the firm's 401(k) plan. Assuming that Luis is in the 25 percent tax bracket, calculate his taxable income and the amount of his tax savings. Assume an individual employee can put as much as $18,500 into a tax-deferred 401(k) plan. The standard deduction for 2018 is $12,000. If necessary, round the answer for tax savings to the nearest cent. Taxable income $ Amount of his tax savings $ How much did it actually cost Luis on an after-tax basis to make this retirement plan contribution? If necessary, round the answer to the nearest cent. $

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter10: Liabilities: Current, Installment Notes, And Contingencies

Section: Chapter Questions

Problem 10.11EX: Payroll tax entries According to a summary of the payroll of Mountain Streaming Co., 120,000 was...

See similar textbooks

Similar questions

eBook Chapter 3Financial Planning Exercise 2Estimating taxable income, tax liability, and potential refund Arabella Cunningham is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned $39,200 as a sales representative for Planning Associates; $2,744 of her wages was withheld for federal income taxes. In addition, she had interest income of $185. The standard deduction in 2018 was $12,000 for single. The appropriate tax rate schedule is shown below: EXHIBIT 3.3 Sample Tax Rate Schedules Tax rates levied on personal income vary with the amount of reported taxable income and the taxpayer's filing status. 2018 Tax Rate Schedules Single Taxable Income Tax Rate $0—$9,525 10% of taxable income $9,526—$38,700 $952.50 plus 12% of the amount over $9,525 $38,701—$82,500 $4,453.50 plus 22% of the amount over $38,700 $82,501—$157,500 $14,089.50 plus 24% of the amount over $82,500 $157,501—$200,000 $32,089.50 plus 32% of the…
Problem 9-39 (LO. 6) For thProblem 9-36 (LO. 6) Amber's employer, Lavender, Inc., has 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 for2019?e following scenarios, compute the maximum total deductible contribution to a traditional IRA for 2019.
Problem 12-24 (c) (LO. 3) Ambre Corporation hires eight individuals on April 2, 2019, all of whom qualify for the work opportunity tax credit. Five of the individuals receive wages of $8,600 during 2019, and each individual works 510 hours during the year. The other three individuals each work 300 hours, and each receives wages of $3,400 during the year. If Ambre pays total wages of $191,000 to its employees during the year, how much of this amount is deductible in 2019, assuming the work opportunity credit is taken? $_____________
Exercise 15-19 (LO. 3, 4) In 2020, Henry Jones works as a freelance driver, finding customers using various platforms like Uber and Grubhub. He is single and has no other sources of income. In 2020, Henry's qualified business income from driving is $61,200. Assume Henry takes the standard deduction of $12,400. Click here to access the 2020 individual tax rate schedule to use for this problem. Assume the QBI amount is net of the self-employment tax deduction. Compute Henry's QBI deduction and his tax liability for 2020. QBI deduction: $fill in the blank 1Tax liability (round to the nearest dollar): $fill in the blank 2
Problem 5-3Individual Retirement Accounts (LO 5.3) Karen, 28 years old and a single taxpayer, has a salary of $35,000 and rental income of $33,000 for the 2021 calendar tax year. Karen is covered by a pension through her employer. AGI phase-out range for traditional IRA contributions for a single taxpayer who is an active plan participant is $66,000 – $76,000. Question Content Area a. What is the maximum amount that Karen may deduct for contributions to her traditional IRA for 2021?$fill in the blank abcab0f9afd1fe0_1 Question Content Area b. If Karen is a calendar year taxpayer and files her tax return on August 15, what is the last date on which she can make her contribution to the IRA and deduct it for 202
Module 5 - Practice QuestionMr. Jay Brown is 66 years of age and his 2020 income is made up of employmentincome of $75,800, contributed $6,500 to his RRSP. He also earned interestincome from Guaranteed Investment Certificate (GIC) of $3,700 during 2020 andreceived Old Age Security benefits of $7,400 (because of large business lossesduring the previous two years, no amount was withheld from the OAS payments).Mr. Brown and his family live in Toronto, Ontario. For 2020, Mr. Brown’semployer withheld maximum CPP ($2,898) and EI ($856) contributions. Otherinformation pertaining to 2020 is as follows:1. Mr. Brown’s spouse is 59 years old and qualifies for the disability tax credit.Her income for the year totaled $4,500.2. Mr. and Mrs. Brown have two daughters, Keith, aged 15 and Laura, aged17. Keith had income of $2,700 for the year while Laura had net income of$3,000. In September 2020, Laura began full time attendance at a Canadianuniversity. Mr. Brown paid her tuition fees of $6,000, of…
Problem 12-24 (b) (LO. 3) Olenka Corporation hires 13 individuals on March 12, 2019, all of whom qualify for the work opportunity credit. Nine of these individuals receive wages of $16,500 during 2019, and each individual works more than 400 hours during the year. The remaining four employees worked 100 hours and earned $2,100 during the year. b. If Olenka pays total wages of $312,000 to its employees during the year, how much of this amount is deductible in 2019, assuming the work opportunity credit is taken? $_____________
Problem 10-25 (LO. 2) For calendar year 2020, Jean was a self-employed consultant with no employees. She had $80,000 of net profit from consulting and paid $7,000 in medical insurance premiums on her policy covering 2020. How much of these premiums may Jean deduct as a deduction for AGI? As an itemized deduction? If an amount is zero, enter "0". Self-employed persons can deduct fill in the blank 1 % of their medical insurance premiums as a deduction for AGI in 2020. Thus, Jean may deduct $fill in the blank 2 as a deduction AGI and she may deduct $fill in the blank 4 as an itemized deduction (subject to the AGI floor).
Problem 17-2 (Algo) PBO calculations; present value concepts [LO17-3] Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.4% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $92,000 at the end of 2021 and the company's actuary projects her salary to be $290,000 at retirement. The actuary's discount rate is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:2. Estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021.3. What is the company's projected benefit obligation at the end of 2021 with respect to Davenport? (Do not round intermediate calculations. Round your final answer…
Problem 9-13----2019The FUTA Tax (LO 9.6) Thomas is an employer with two employees, Patty and Selma. Patty's wages are $12,450 and Selma's wages are $1,310. The state unemployment tax rate is 5.4 percent. Calculate the following amounts for Thomas: Round your answer to two decimal places. a. FUTA tax before the state tax credit $ b. State unemployment tax $ c. FUTA tax after the state tax credit $
Problem 9-33 (LO. 5) Melanie is employed full-time as an accountant for a national hardware chain. She recently started a private consulting practice, which provides tax advice and financial planning to the general public. For this purpose, she maintains an office in her home. Expenses relating to her home for 2020 are as follows: Real property taxes $3,600 Interest on home mortgage 3,800 Operating expenses of home 900 Melanie's residence cost $350,000 (excluding land) and has living space of 2,000 square feet, of which 20% (400 square feet) is devoted to business. The office was placed in service in February 2019, and under the Regular Method, Melanie had an unused office in the home deduction of $800 for 2019. Assume there is sufficient net income from her consulting practice. Click here to access the depreciation table. Round deprecation to the nearest dollar. a. What amount can Melanie claim this year for her office in the home deduction under the Regular…
Problem 9-33 (LO. 5) Melanie is employed full-time as an accountant for a national hardware chain. She recently started a private consulting practice, which provides tax advice and financial planning to the general public. For this purpose, she maintains an office in her home. Expenses relating to her home for 2020 are as follows: Real property taxes $3,600 Interest on home mortgage 3,800 Operating expenses of home 900 Melanie's residence cost $350,000 (excluding land) and has living space of 2,000 square feet, of which 20% (400 square feet) is devoted to business. The office was placed in service in February 2019, and under the Regular Method, Melanie had an unused office in the home deduction of $800 for 2019. Assume there is sufficient net income from her consulting practice. depreciation table below. Round deprecation to the nearest dollar. 8-7cCost Recovery Tables Summary of Tables Exhibit 8.3 Regular MACRS table for personalty. Depreciation…