Matt works for Rowan University and has an annual income of $200,000. Assume Matt has a combined
Question:
- Matt works for Rowan University and has an annual income of $200,000. Assume Matt has a combined tax rate of 25%. In addition to salary, Matt receives health insurance, long-term disability insurance, and life insurance from Rowan.
- Rowan offers health insurance on a non-contributory basis. The premium is $8,000 per year. What would Matt’s total yearly income tax liability?
- Matt decides to put $4,000 into a dependent care flexible spending account. What would be the total yearly income tax liability for Matt now?
- If Matt should become disabled, he could no longer work for Rowan and would lose his $200,000 annual income. The long-term disability contract promises to pay Matt $100,000 per year should he become disabled.
Rowan also offers long-term disability insurance on a non-contributory basis. The premium is $5,500 per year.
If Matt should become disabled, what would be his total yearly income tax liability?
Suppose Rowan offers long-term disability insurance described in (1c) on an employee pay all basis. Suppose Matt paid the entire premium cost of $5,500 per year using a pre-tax salary reduction arrangement.
If Matt should become disabled, what would be his total yearly income tax liability? (3 points)
- Suppose Rowan offers long-term disability insurance described in (1c) on an employee pay-all basis. Suppose Matt paid the entire premium cost of $5,500 per year using an after-tax salary reduction arrangement.
If Matt should become disabled, what would be his total yearly income tax liability?
f. Matt also receives group term life insurance (GTLI) from Rowan on a noncontributory basis. The face amount of this GTLI policy is $75,000 and the entire premium cost of $750 per year ($10 per $1000 of face amount). What impact will this have on the employee’s total yearly income tax liability?
2. Joe has been working for Company A for a total of four years. Company A offers Joe a 401(k) plan. At the end of the fourth year of working at Company A, Joe leaves and begins working for another employer – Company B. Company B also offers a 401(k) plan.
When Joe leaves Company A, his 401(k)-account balance is $ 108,000, of which:
- Company A’s contribution = $60,000
- Joe’s contribution = $40,000
- Interest earnings = $8,000.
- Upon leaving Company A, how much of the 401(k)-account balance can Joe take with him at a minimum?
- If Company A uses a three-year cliff vesting schedule, how much of the 401(k)-account balance can Joe take with him in total?
- If Company A uses a graded 2-6 vesting rule, how much of the 401(k)-account balance can Joe take with him in total?
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold