Question
Matt works for Fresh Corporation. Fresh offers a cafeteria plan that allows each employee to receive $15,000 worth of benefits each year. The menu of
Matt works for Fresh Corporation. Fresh offers a cafeteria plan that allows each employee to receive $15,000 worth of benefits each year. The menu of benefits is as follows:
Benefit | Cost |
---|---|
Health insurancesingle | $ 5,000 |
Health insurancewith spouse | $ 8,000 |
Health insurancewith spouse and dependents | $ 11,000 |
Dental and vision | $ 1,500 |
Dependent careany specified amount up to $5,000 | Variable |
Adoption benefitsany specified amount up to $5,000 | Variable |
Cashany specified amount up to $15,000 plan benefit | Variable |
401(k)any specified amount up to $10,000 | Variable |
For each of the following independent circumstances, determine the amount of income Matt must recognize and the amount of deduction Fresh may claim:
Note: Leave no answer blank. Enter zero if applicable.
Required:
Matt selects the single health insurance benefit and places $10,000 in his 401(k).
Matt selects the single health insurance benefit, is reimbursed $5,000 for dependent care, and takes the remainder in cash.
Matt selects the single health insurance benefit and is reimbursed for $10,000 of dependent care.
Matt gets married and selects the health insurance with spouse benefit and takes the rest in cash to help pay for the wedding.
Matt elects to take all cash.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started