Question

Steve is the librarian in his city's library. The library provides group diability insurance where premiums are paid by employees with after-tax dollars. He enrolls in a policy through the employer that provides a benefit of $4,200 a month. If he is in the 25% tax bracket and is disabled, what are his benefits after tax?
a. $0.
b. $1,050.
c. $3,150.
d. $4,200.

Answer 1

Answer: $4200

Explanation:

Tax benefit refers to the reduction in the tax liability which is enjoyed by an individual and helps the individual reduce his or her tax burden.

Since we are already given the information that Steve enrolls in a policy through the employer that provides a benefit of $4,200 a month, then his benefits after tax is $4200.