Sarah received the following benefits from her employer in 2019:
$5,000 year-end bonus for exceeding sales expectations, $500 cash as a length-of-service award, and $2,400 for insurance premiums paid by her employer for a disability income policy. How much must Sarah include in her gross income in 2019?
$7,800. |
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$0 |
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None of these answers. |
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$2,400. |
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$5,400. |
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$5,500. |
Gross income includes any type of monetary benefit paid to an individual or business, whether it be earned as a result of personal services or business activities or produced by investments and capital assets. The valuation of gross income is the first step in computing whether any federal or state income tax is owed by the recipient.However any amount paid by employers for health and disability premium won't be count as a taxable income.
Conclusion - So total Gross Income is $ 5,500
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