Ambers employer, Lavender, Inc., has a 401(k) plan that permits salary deferral elections by its employees.

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Amber’s employer, Lavender, Inc., has a § 401(k) plan that permits salary deferral elections by its employees. Amber’s salary is $99,000, her marginal tax rate is 24%, and she is 42 years old.

a. What is the maximum amount Amber can elect for salary deferral treatment for 2019?

b. If Amber elects salary deferral treatment for the amount in part (a), how much can she save in taxes?

c. What amount would you recommend that Amber elect for salary deferral treatment for 2019?

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Related Book For answer-question

South-Western Federal Taxation 2020 Comprehensive

ISBN: 9780357109144

43rd Edition

Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman

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Question Posted: Sep 19, 2019 09:22 AM

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Ambers employer, Lavender, Inc., has a 401(k) plan that permits salary deferral elections by its employees.

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South-Western Federal Taxation 2020 Comprehensive

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