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Santini's new contract for 2021 indicates the following compensation and benefits: Benefit Description Salary Health insurance Restricted stock grant Bonus Hawaii trip Group-term life insurance Parking ($304 per month) Amount $ 131,000 10,000 2,500 5,200 4,200 1,800 3,648 Santini is 54 years old at the end of 2021. He is single and has no dependents. Assume that the employer matches $1 for $1 for the first $6,000 that the employee contributes to his 401(k) during the year. The restricted stock grant is 500 shares granted when the market price was $5 per share. Assume that the stock vests on December 31, 2021, and that the market price on that date is $12.50 per share. Also assume that Santini is willing to make any elections to reduce equity-based compensation taxes. The Hawaii trip was given to him as the outstanding salesperson for 2020. The group-term life policy gives him $150,000 of coverage. Assume that Santini does not itemize deductions for the year. Determine Santini's taxable income and income tax liability for 2021. Use Tax rate schedules and Exhibit 12-8. (Round your answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

Santini's new contract for 2021 indicates the following compensation and benefits: Benefit Description Salary Health insurance Restricted stock grant Bonus Hawaii trip Group-term life insurance Parking ($304 per month) Amount $ 131,000 10,000 2,500 5,200 4,200 1,800 3,648 Santini is 54 years old at the end of 2021. He is single and has no dependents. Assume that the employer matches $1 for $1 for the first $6,000 that the employee contributes to his 401(k) during the year. The restricted stock grant is 500 shares granted when the market price was $5 per share. Assume that the stock vests on December 31, 2021, and that the market price on that date is $12.50 per share. Also assume that Santini is willing to make any elections to reduce equity-based compensation taxes. The Hawaii trip was given to him as the outstanding salesperson for 2020. The group-term life policy gives him $150,000 of coverage. Assume that Santini does not itemize deductions for the year. Determine Santini's taxable income and income tax liability for 2021. Use Tax rate schedules and Exhibit 12-8. (Round your answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Santini's new contract for 2021 indicates the following compensation and benefits: Benefit Description Salary Health insurance Restricted stock grant Bonus Hawaii trip Group-term life insurance Parking ($304 per month) Santini is 54 years old at the end of 2021. He is single and has no dependents. Assume that the employer matches $1 for $1 for the first $6,000 that the employee contributes to his 401(k) during the year. The restricted stock grant is 500 shares granted when the market price was $5 per share. Assume that the stock vests on December 31, 2021, and that the market price on that date is $12.50 per share. Also assume that Santini is willing to make any elections to reduce equity-based compensation taxes. The Hawail trip was given to him as the outstanding salesperson for 2020. The group-term life policy gives him $150,000 of coverage. Assume that Santini does not itemize deductions for the year. Description Determine Santini's taxable income and income tax liability for 2021. Use Tax rate schedules and Exhibit 12-8. (Round your answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) Taxable Benefits Salary Restricted stock grant Amount $ 131,000 10,000 2,500 5,200 4,200 Bonus Hawaii trip Life Insurance (taxable portion) Parking AGI Standard Deduction Taxable Income Income Tax Liability 1,800 3,648 $ Amount 0
Transcribed Image Text:Santini's new contract for 2021 indicates the following compensation and benefits: Benefit Description Salary Health insurance Restricted stock grant Bonus Hawaii trip Group-term life insurance Parking ($304 per month) Santini is 54 years old at the end of 2021. He is single and has no dependents. Assume that the employer matches $1 for $1 for the first $6,000 that the employee contributes to his 401(k) during the year. The restricted stock grant is 500 shares granted when the market price was $5 per share. Assume that the stock vests on December 31, 2021, and that the market price on that date is $12.50 per share. Also assume that Santini is willing to make any elections to reduce equity-based compensation taxes. The Hawail trip was given to him as the outstanding salesperson for 2020. The group-term life policy gives him $150,000 of coverage. Assume that Santini does not itemize deductions for the year. Description Determine Santini's taxable income and income tax liability for 2021. Use Tax rate schedules and Exhibit 12-8. (Round your answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) Taxable Benefits Salary Restricted stock grant Amount $ 131,000 10,000 2,500 5,200 4,200 Bonus Hawaii trip Life Insurance (taxable portion) Parking AGI Standard Deduction Taxable Income Income Tax Liability 1,800 3,648 $ Amount 0
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