A TSB (Tax Saver Benefit) plan allows you to put money into an account at the beginning of the calendar year that can be used for medical expenses. This amount is not subject to federal tax (hence the phrase TBS). As you pay medical expenses during the year, you are reimbursed by the administrator of the TBS until the TBS account is exhausted. From that point on, you must pay your medical expenses out of your own pocket. On the other hand, if you put more money into your TBS account than the medical expenses you incur, this extra money is lost to you. Your annual salary is $80,000 and your federal income tax rate is 30%. Assume that your medical expenses in a year are normally distributed with mean $2000 and a standard deviation $500. Build a simulation model in @Risk in which the output is the amount of money left to you after paying taxes putting money into a TBS account and paying any medical expenses. Experiment with the amount of money put into a TBS account using RISKSIMTABLE. Vary the amounts in the TBS from $1000 to $3000 in increments of $250.© BrainMass Inc. brainmass.com October 25, 2018, 2:48 am ad1c9bdddf
I hope you are doing well. Please see my response attached. @RISK generates a lot of graphs. I have only pasted a few there. But if ...
The solution goes into a great amount of detail regarding the question being asked. Step by step explanation is provided for each part of the question which makes it very easy to follow along for anyone with just a basic understanding of the concepts. Overall, an excellent response to the question being asked.
Your friend, Sal, wants to know how much he would save in taxes by contributing to his 401(k) plan. He can invest up to 10% of his income into the plan. His current income is US$50,000 per year, and he is in the 25% tax bracket.
In a memo to your friend that outlines how much he would save in taxes by contributing to his 401(k) plan. Include an Excel spreadsheet that provides answers for each of the following investment choices: 2%, 4%, 6%, 8%, and 10%. Additionally, provide Sal with other suggestions to minimize his taxes.View Full Posting Details