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Minimizing Taxes Question

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Lu, wants to start contributing to her employer's 401(k) plan to save money for retirement. She wonders how much she would save on her income taxes by contributing to the plan. She can invest up to 7% of her income into the plan. Her current income is US$60,000 per year, and she is in the 15% tax bracket.

Utilizing the formula: salary x % x tax rate, the Library, Internet, and all other resources at your disposal. Prepare a PowerPoint Presentation for your friend that outlines how much she would save in taxes by contributing the following percentages of her salary to her 401(k) plan: 1%, 2%, 3%, 4%, 5%, 6%, and 7%. Additionally, provide Lu with other suggestions to minimize her taxes.

Please help me to calculate calculates

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Solution Summary

The expert examines minimizing taxes.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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  • "Your explanation to the answers were very helpful."
  • "What does 1 and 0 means in the repair column?"
  • "Went through all of the formulas, excellent work! This really helped me!"
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  • "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
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