Horace is an employee of Ace Electric Company. Ace provides all employees with group term life insurance equal to twice their annual salary. Enter in the "Includable Premium" column the base amount upon which the includable premium will be determined. In the "Premium Taxed" column, enter the amount of premium to be included in Horace's gross income. Refer to the IRS Premium Table to answer the following questions.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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How do you calculate premium taxed?
Nontaxable Fringe Benefits (LO. 4)
Horace is an employee of Ace Electric Company. Ace provides all employees with group term life insurance equal to twice their annual salary.
Enter in the "Includable Premium" column the base amount upon which the includable premium will be determined. In the "Premium Taxed" column,
enter the amount of premium to be included in Horace's gross income. Refer to the IRS Premium Table to answer the following questions.
Note: If required, round the final premium taxes to the nearest cent. If any amount is zero, enter "0".
Includable Premium
Premium Taxed
a.
Horace is 26 and earns $16,000 per year.
b. Horace is 26 and earns $42,000 per year.
34,000
Horace is 63 and earns $42,000 per year.
34,000 V
C.
d.
Horace is 46 and earns $90,000 per year.
130,000
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The IRS provides a table that calculates the income from premiums paid in excess of the exclusion.
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Transcribed Image Text:Nontaxable Fringe Benefits (LO. 4) Horace is an employee of Ace Electric Company. Ace provides all employees with group term life insurance equal to twice their annual salary. Enter in the "Includable Premium" column the base amount upon which the includable premium will be determined. In the "Premium Taxed" column, enter the amount of premium to be included in Horace's gross income. Refer to the IRS Premium Table to answer the following questions. Note: If required, round the final premium taxes to the nearest cent. If any amount is zero, enter "0". Includable Premium Premium Taxed a. Horace is 26 and earns $16,000 per year. b. Horace is 26 and earns $42,000 per year. 34,000 Horace is 63 and earns $42,000 per year. 34,000 V C. d. Horace is 46 and earns $90,000 per year. 130,000 Feedback ¥Check My Work The IRS provides a table that calculates the income from premiums paid in excess of the exclusion. Check My Work Previous Next
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