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Benefits + Taxation

Jamal, age 52, is a manager for Triple W Company. His annual salary is $110,000 and he receives the following fringe benefits during the current year:

- Triple W pays for all employees' health and accident insurance. Triple W pays $4,000 for Jamal's health insurance during the year.
- Triple W provides Jamal with group-term life insurance coverage of $200,000 during the year. The monthly inclusion amount per $1,000 of coverage is $.23.
- Triple W has a flexible benefits plan in which employees may participate to pay any costs not reimbursed by their health insurance. Jamal has $3,600 withheld from his salary under the plan. During the year he receives reimbursements of $3,300.
- Triple W pays parking costs for all management employees. Jamal's parking costs $220 month.
- Triple W pays Jamal's annual membership dues of $450 to the Society of Human Resource Management Association. The company also subscribes to several management journals for Jamal costing $650 a year.
- Jamal took a college class on employment law and Triple W reimbursed his tuition of $6,000.
- Jamal's consumption of coffee provided by Triple W is valued at $700 a year.

How much income must Jamal report from his job?

A. $106,400
B. $107,564
C. $110,000
D. $110,414

Health is excludable
Life is to first 50,000 (150,000/1,000x.23) x 12 = 414 needs to be added
Flexible benefits - to first 2,500? I don't know where to place this one.
Parking is excluded
Memberships, tuition, journals - excluded
Coffee - de minimus

Answer is C. But I don't know if the flex benefits are excluded or not.

Solution Preview

Excess life insurance coverage = ((200000-50000)/1000)*0.23*12 = ...

Solution Summary

The benefits and taxation for Triple W Company.

$2.19