The extent of income tax saved by R by participating in the program with $3,000 this year along with if R was in the 25 % federal marginal tax bracket. Introduction: Employment decisions: Smart decisions about employee benefits can increase actual income 30 percent or more. Such decisions help recognize regular investments to get long-term maximum earnings. An employee benefit is the general term for the indirect benefits one receives at work that are concerned with such things other than compensation for employment it includes benefits like paid vacations sick days, health insurance, a retirement plan, child care, parental leave, and an educational assistance program. While some benefits are free others will cost some money, but they also will save money.

Question

Ramon Alvarez, of Nome, Alaska, signed up for his employer's flexible spending account plan primarily because he can use the money to pay for unreimbursed medical expenses for himself and his disabled son. Ramon is in the 15 percent marginal tax bracket; pays Social Security payroll taxes of 7.65%, and pays a 4 percent state income tax rate. How much will he save in income taxes by particpating in the program this year in the amount of $3,000? How much would Ramon save if he was in the 25 percent federal marginal tax bracket?

Answer 1

Question

Chapter 1, Problem 7DTM

Summary Introduction

To determine: The extent of income tax saved by R by participating in the program with $3,000 this year along with if R was in the 25 % federal marginal tax bracket.

Introduction:

Employment decisions:Smart decisions about employee benefits can increase actual income 30 percent or more. Such decisions help recognize regular investments to get long-term maximum earnings. An employee benefit is the general term for the indirect benefits one receives at work that are concerned with such things other than compensation for employment it includes benefits like paid vacations sick days, health insurance, a retirement plan, child care, parental leave, and an educational assistance program. While some benefits are free others will cost some money, but they also will save money.

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Ramon Alvarez, of Nome, Alaska, signed up for his employer's flexible spending account plan primarily because he can use the money to pay for unreimbursed medical expenses for himself and his disabled son. Ramon is in the 15 percent marginal tax bracket; pays Social Security payroll taxes of 7.65%, and pays a 4 percent state income tax rate. How much will he save in income taxes by particpating in the program this year in the amount of $3,000? How much would Ramon save if he was in the 25 percent federal marginal tax bracket?

Employee Benefits Decision Ramon Alvarez, of Nome, Alaska, signed up for his employer’s flexible spending account plan primarily because he can use the money to pay for unreimbursed medical expenses for himself and his disabled son. Ramon is in the 15 percent marginal tax bracket, pays Social Security payroll taxes of 7.65 percent, and pays a 5 percent state income tax rate. How much will he save in income taxes by participating in the program this year in the amount of $2,800? Round your answer to the nearest dollar. $ How much would Ramon save if he was in the 25 percent federal marginal tax bracket? Round your answer to the nearest dollar. $

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