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Ann Sacks has an annual salary of $30,000. Her employer established a Section 401(k) plan, providing that she may invest up to 12 percent of
Ann Sacks has an annual salary of $30,000. Her employer established a Section 401(k) plan, providing that she may invest up to 12 percent of her salary in the plan. The employer will match the first five percent. This year Ann took an eight percent salary reduction. (a.) What is Ann's gross income from compensation? (b.) What amount is subject to social security tax? (c.) What is the employer's compensation deduction? (d.) What is Ann's total increase in her Section 401(k) account?
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