Karen Wilson and Katie Smith are looking at the company health options and trying to determine how much their net pay will decrease if they sign up for the qualified cafeteria plan offered by the company. Karen a married woman with three exemptions earns 2550 per biweekly payroll. Katie a single woman with two exemptions also earns 2325, per biweekly payroll. the biweekly employee contribution to health care that would be subject to the cafeteria plan is $165. compute the taxable income for Karen and Katie. compute Karen's taxable income if she declines to participate in the cafeteria plan. karens taxable income if she participates in the cafeteria plan. Katie income if she declines to participate in the cafeteria plan. and Katie taxable income if she participate in the cafeteria plan