Answer:
His after-tax benefit of receiving each of these benefits are as follows:
After-tax benefits of taxable items = $410,292
Non taxable benefits:
Health insurance = $15,400
Dental insurance = $4,800
Non taxable premium = $830
Dependent care = $4,500
Professional dues = $1,400
Explanation:
Life insurance = 4,200
Group-term life insurance coverage = $253,00
Amount of premium exempted from tax by law =$50,000
Non taxable premium = (Amount of premium exempted from tax by law / Group-term life insurance coverage) * Life insurance = ($50,000 / $253,000) * 4,200 = $830
Taxable premium = Life insurance - Non taxable premium = $4,200 - $830 = $3,370
Therefore, we have:
Taxable benefits = Salary + Personal use of company jet + Taxable premium = $307,000 + $293,000 + $3,370 = $603,370
Income tax on benefits = Taxable benefits * Marginal tax rate = $603,370 * 32% = $193,078
After-tax benefits of taxable items = Taxable benefits - Income tax on benefits = $603,370 - $193,078 = $410,292
Therefore, his after-tax benefit of receiving each of these benefits are as follows:
After-tax benefits of taxable items = $410,292
Non taxable benefits:
Health insurance = $15,400
Dental insurance = $4,800
Non taxable premium = $830
Dependent care = $4,500
Professional dues = $1,400
