PLEASE HELP ME WITH D, E, AND F

1. Matt works for Rowan University and has an annual income of $100,000. 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 as described below. Matt also has the opportunity to place funds into a dependent care flexible spending account.

1. Rowan offers health insurance on a non-contributory basis. The premium is $6,000 per year. What would Matts total yearly income tax liability? (2 points)

a) ANSWER: $25,000

2. Matt decides to put $2,500 into a dependent care flexible spending account. What would be the total yearly income tax liability for Matt now? (2 points)

b) ANSWER: $24,375

3. If Matt should become disabled, he could no longer work for Rowan and would lose his $100,000 annual income. Suppose Rowan also offers long term disability insurance on a non-contributory basis. The premium is $3,000 per year. The long-term disability contract promises to pay Matt $80,000 per year should he become disabled.

If Matt should become disabled at the beginning of the year, what would be his total yearly income tax liability? (3 points)

c) ANSWER: $20,000

4. Suppose Rowan offers long-term disability insurance described in (1c) on an employee pay all basis. Suppose Matt paid the entire premium cost of $3,000 per year using a pre-tax salary reduction arrangement.

If Matt should become disabled at the beginning of the year, what would be his total yearly income tax liability? (3 points)

5. Suppose Rowan offers long-term disability insurance described in (1c) on an employee pay all basis. Suppose Matt paid the entire premium cost of $3,000 per year using an after-tax salary reduction arrangement.

If Matt should become disabled at the beginning of the year, what would be his total yearly income tax liability? (3 points)

6. Matt also receives group term life insurance (GTLI) from Rowan on a non-contributory basis. The face amount of this GTLI policy is $90,000. This contract has a premium cost of $900 per year ($10 per $1000 of face amount). What impact will this have on Matts total yearly income tax liability? (3 points)