Question

# JDD Corporation provides the following benefits to its employee, Ahmed (age 49): Salary \$ 366,000 Health...

JDD Corporation provides the following benefits to its employee, Ahmed (age 49):

 Salary \$ 366,000 Health insurance 17,400 Dental insurance 4,500 Life insurance 3,600 Dependent care 4,000 Professional dues 1,070 Personal use of company jet 270,000

Assume the life insurance is a group-term life insurance policy that provides \$244,000 of coverage for Ahmed. (Use EXHIBIT 12-8.)

Assuming Ahmed is subject to a marginal tax rate of 32 percent, what is his after-tax benefit of receiving each of these benefits (ignoring FICA taxes)? (Enter all amounts as positive values. Round your intermediate computations and final answers to the nearest whole dollar.)

JDD Corporation provides the following benefits to its employee, Ahmed (age 49):

 Salary \$ 366,000 Health insurance 17,400 Dental insurance 4,500 Life insurance 3,600 Dependent care 4,000 Professional dues 1,070 Personal use of company jet 270,000

Assume the life insurance is a group-term life insurance policy that provides \$244,000 of coverage for Ahmed. (Use EXHIBIT 12-8.)

Assuming Ahmed is subject to a marginal tax rate of 32 percent, what is his after-tax benefit of receiving each of these benefits (ignoring FICA taxes)? (Enter all amounts as positive values. Round your intermediate computations and final answers to the nearest whole dollar.)

 Description Amount Taxable benefits Salary \$366,000 Personal use of company jet 270,000 Life insurance (taxable portion) Taxable total \$636,000 Marginal tax rate 32 % Income tax on benefits After-tax benefit of taxable items Nontaxable benefits Health insurance \$17,400 Dental insurance 4,500 Life insurance (nontaxable portion) Dependent care 4,000 Professional dues 1,070 Nontaxable total \$26,970 After-tax benefit of salary and benefits \$26,970

 S.No Description Calculations Amount(\$) Taxable benefits 1 Salary 366,000 2 Personal use of computer jet 270,000 3 Life insurance 0 4 Taxable total 366000+270000 636,000 5 Marginal tax rate 32% 6 Income tax on benefits 636000*32% 203,520 7 After tax benefit of taxable items 636000-203520 432,480 Non taxable benefits 8 Health insurance 17,400 9 Dental insurance 4,500 10 Life insurance 3,600 11 Dependent care 4,000 12 Professional dues 1,070 13 Non taxable total 30,570 After tax benefit of salary and benefits 432480+30570 463,050

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