Ginny is a sole proprietor. She wants to provide 60 percent of salary disability coverage to Joanna, her employee who is in a 35 percent combined tax bracket. Joanna's W-2 wages are $40,000 and Ginny's annual contribution to her qualified profit-sharing account on Joanna's behalf is $4,000.

1. Ignoring cost-of-living adjustments or any possible Social Security benefits, calculate Joanna's net-of-tax monthly disability payment if Ginny pays the disability premium and Joanna's tax bracket during disability remains at 35 percent.

a. $1,300

b. $1,430

c. $2,000

d. $2,200

2. Ignoring cost-of-living adjustments or any possible Social Security benefits, calculate Joanna's net-of-tax monthly disability benefit if Joanna pays the disability premium and Joanna's tax bracket during disability remains at 35 percent.

a. $1,300

b. $1,430

c. $2,000

d. $2,200