Winnie Bay Gogh is single and has two children from her previous marriage to Wherediddy Gogh. Her daughter, Go, Gogh, is 9 years old in 2019 and loves disco. She lives with Winnie, and Winnie provides more than half of her support. Hugh Gogh, the son, currently lives with his father and was with his father during all of 2019. Wherediddy provides more than half of Hugh’s support. Winnie tells you that the divorce agreement from June 2016 stipulates that she must pay Wherediddy $400 per month until Hugh reaches age 18. At that time, the payments reduce to $150. If Wherediddy remarries, she will only have to pay the reduced amount of $250 per month until Hugh reaches age 18 and nothing after that. Winnie provides you with the following additional information: • She wishes to contribute to the presidential election campaign. • She lives at 523 Dongo Drive in Salem, IN 46202 • Winnie’s birthday is May 31, 1974, • Go’s birthday is October 5, 2010, • Hugh’s birthday is December 1, 2003, • Winnie’s social security number is 123-45-6789 • Go’s social security number is 005-61-7232 • Hugh’s social security number is 004-23-3419 • Wherediddy’s social security number is 111-22-3333 • She does not have any foreign bank accounts or trusts 1. Winnie is employed as a nuclear engineer with Barton Olson Oversite Management, Inc. (BOOM). Her annual base salary is $90,000, BOOM has an extensive fringe benefits program for its employees Winnie’s pay stubs indicate that she had $8,230 withheld in federal taxes, $3,587 in state taxes, $5,695 in Social Security taxes, and $1,332 in Medicare taxes. 

Her compensation includes the following:

 a) Base Salary (before subtracting her pre-tax payments or adding any taxable fringe benefits) $90,000 

 b) Group term life insurance = $50,000 60

 c) Group term life insurance > $50,000 97 

 d) Taking advantage of BOOM’s educational assistance program, Winnie enrolled in four graduate engineering classes at a local college. BOOM paid her tuition, fees, and other course-related costs. 7,500 

 e) Winnie receives free parking in the company’s security garage that would normally cost $70 per month. 840 

 f) BOOM has an employee wellness program at work and an on-site gym facility. Employees use of the gym for no charge. The value of the membership is $480 per year. 480 

 g) Winnie’s employer provides a qualified retirement plan (401k) at work. Winnie’s contributions are not included in her taxable income but are deducted from her salary on a pretax basis. Winnie’s employer matches Winnie’s contributions, thus contributing $8,000 during 2019. 8,000 (Winnie) 8,000 (BOOM) 

 h) BOOM pays Winnie’s health insurance premiums. 6,000 

 i) Winnie pays the additional health insurance premiums to cover her children on a pretax basis. 1,500 

 j) Winnie manages the safety program for BOOM. In recognition of her superior handling of three potential crises during the year 2019, Winnie was awarded the “Employee Safety Award” on December 15, 2019. The company gave her a wristwatch. 300 

k) Winnie received a Christmas bonus check in December. She did not cash the check until January 2020. 1,000 Determine the amount of Winnie’s taxable compensation from BOOM and enter the amount on Line1 of Form 1040 (page 2)

Answer rating: 100% (QA)

Base salary 90 000 Group term life insurance 50 000 60 taxable 30 000 Group term life insuran... View the full answer