Sara’s annual salary amounts to MAD 170,000. Her tax credit is MAD 5750. She gave a MAD 1,500 gift to her favorite association. She can claim this gift as a tax deduction. If she pays tax at a rate of 25%, calculate her annual net income.

Sara’s annual salary amounts to MAD 170,000. Her tax credit is MAD 5750. She gave a MAD 1,500 gift to her favorite association. She can claim this gift as a tax deduction. If she pays tax at a rate of 25%, calculate her annual net income.

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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Concept explainers

Tax Deferred Retirement Benefits

It stands for Simplified Employee Pension Individual Retirement Account. This savings plan is for self-employed persons such as independent contractors, freelancers, entrepreneurs, etc. The tax rules of SEP IRA are the same as traditional IRA. Entrepreneurs can also open SEP IRA accounts for their employees and gain a tax advantage. The employees cannot make contributions to these accounts by themselves however they will be taxed upon withdrawal.

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