Amber's employer, Lavender, Inc., has a 5 401(k) plan that permits salary deferral elections by its employees. Amber's salary is $99,000, and 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 2020? b. If Amber elects salary deferral treatment for the above amount, how much can she save in taxes? Her tax liability for 2020 would be reduced by $ C. What is the recommended amount that Amber should elect as salary deferral treatment for 2020?

Amber's employer, Lavender, Inc., has a 5 401(k) plan that permits salary deferral elections by its employees. Amber's salary is $99,000, and 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 2020? b. If Amber elects salary deferral treatment for the above amount, how much can she save in taxes? Her tax liability for 2020 would be reduced by $ C. What is the recommended amount that Amber should elect as salary deferral treatment for 2020?

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter9: Payroll, Estimated Payments, And Retirement Plans

Section: Chapter Questions

Problem 13P

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Note: Use the Tax Tables to calculate the answers to the problems listed. Determine the income tax to withhold from the biweekly wages of the following employees (wage-bracket): If your answer is zero, please enter "0". Karen Overton (single, 0 allowances), $900 wages $ Nancy Haller (married, 4 allowances), $1,000 wages $ Alan Glasgow (married, 1 allowance), $980 wages $ Joseph Kerr (single, 4 allowances), $720 wages $ Ginni Lorenz (single, 1 allowance), $580 wages $