Problem 9-32 (LO. 6)Amber's employer, Lavender, Inc., has a § 401(k) plan that permits salary deferral elections by its employees. Amber's salary is $99,000,and her marginal tax rate is 24% and she is 42 years old.a. What is the maximum amount Amber can elect for salary deferral treatment for 2021?b. If Amber elects salary deferral treatment for the above amount, how much can she save in taxes?Her tax liability for 2021 would be reduced by $c. What is the recommended amount that Amber should elect as salary deferral treatment for 2021?

401k Plans works as a tax saving tool for employees under which a portion/whole of compensation to…

Answered: Amber's employer, Lavender, Inc., has a…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter1: Federal Income Taxation—an Overview

Section: Chapter Questions

Problem 51P: Darrell is an employee of Whitneys. During the current year, Darrells salary is 136,000. Whitneys...

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Darrell is an employee of Whitneys. During the current year, Darrells salary is 136,000. Whitneys net self-employment income is also 136,000. Calculate the Social Security and self-employment taxes paid by Darrell and Whitney. Write a letter to Whitney in which you state how much she will have to pay in Social Security and self-employment taxes and why she owes those amounts.
Amber’s employer, Lavender, Inc., has a § 401(k) plan that permits salary deferral elections by its employees. Amber’s salary is $99,000, her marginal tax rate is 24%, and she is 42 years old. What is the maximum amount Amber can elect for salary deferral treatment for 2020? If Amber elects salary deferral treatment for the amount in part (a), how much can she save in taxes? What amount would you recommend that Amber elect for salary deferral treatment for 2020?
Amber's employer, Lavender, Inc., uses a § 401(k) plan that permits salary deferral elections by its employees. Amber's salary is $99,000, and her marginal tax rate is 24% and she is 42 years old. a. What is the maximum amount Amber can elect for salary deferral treatment for 2022? b. If Amber elects salary deferral treatment for the above amount, how much can she save in Federal income taxes? Ner tax liability for 2022 would be reduced by $ c. What is the recommended amount that Amber should elect as salary deferral treatment for 2022, considering only the Federal income tax effects?
Amber's employer, Lavender, Inc., has a § 401(k) plan that permits salary deferral elections by its employees. Amber's salary is $99,000, and her marginal tax rate is 24% and she is 42 years old. a. What is the maximum amount Amber can elect for salary deferral treatment for 2020? b. If Amber elects salary deferral treatment for the above amount, how much can she save in taxes? Her tax liability for 2020 would be reduced by $ c. What is the recommended amount that Amber should elect as salary deferral treatment for 2020?
Question 3 of 75. Xavier (39) earned $236,000 in wages in 2021. His employer contributed $1,750 to his health savings account during the year. Xavier also took advantage of a payroll deduction plan and made additional, pre-tax contributions of $1,500. He would like to make an additional contribution for 2021 if it will lower his tax liability. What is the maximum, fully deductible amount Xavier can still contribute to his plan? $0 $350 $3,600 $6,000
The Diamond Corporation has two employees, Emily and Mary. Assume Diamond does not defer payroll tax payments or claim employee retention credits or sick and family leave credits. a. If Emily earns wages of $26,000 for 2020, calculate the total amount of the FICA tax that must be paid: by Emily by Diamond Corporation Total b. If Mary earns wages of $164,000 for 2020, calculate the total amount of the FICA tax that must be paid: by Mary by Diamond Corporation Total
QUESTION Brooke has several employees and would like to defer her payroll taxes for 2020. How should she be advised? A Brooke must use Form 7200 to request a payment deferral. B Brooke may defer all of her payroll tax payments until 2021 and 2022. C Brooke may defer her payroll taxes by reducing her payroll deposits calculated on Form 941. D Brooke may defer her payroll taxes even if she receives a credit for the same wages.
Sally hires a maid to work in her home for $280 per month. The maid is 25 years old and not related to Sally. During 2019, the maid worked 9 months for Sally. a. What is the amount of Social Security tax Sally must pay as the maid's employer? b. What is the amount of Medicaare tax Sally must pay as the maid's employer? Sally's employer's Medicare tax: c. What is the amount of Social Security and Medicare tax which must be withheld from the maid's wages? Sally should withhold for Social Security and Medicare tax of:
9 It is February 2021 and Sandra is looking to maximize her RRSP contribution for a deduction on her 2020 income tax return. She has never been part of a Registered Pension Plan. What is the maximum amount that she can contribute to her RRSP and claim on her 2020 personal income tax returns (include carry-forward amounts)? She has provided you with the following information: -Salary in 2018 $10,000 (part-time employment to help with her tuition when she was 19). -Salary in 2019 $80,000. (full-time employment, she was 20). -Salary in 2020 $85,000. (full-time employment, she was 21). -Current salary in 2021 $90,000. (full-time employment, she is 22). -RRSP contribution made previously and deducted on her 2019 tax return for $1,300 Registered Retirement Savings Plan (RRSP): Annual Limits Formula for RRSP contribution limit: 18% of your previous year's earned income less your previous year's pension adjustment to an annual maximum. Annual maximum contribution limit A B C Year 2018 2019…
Ann hires a nanny to watch her two children while she works at a local hospital. She pays the 19-year-old nanny $170 per week for 42 weeks during the current year. Do not round immediate computations and round your final answers to two decimal places. a. What is the employer's portion of Social Security and Medicare tax for the nanny that Ann should pay when she files her Form 1040 for 2018?$ b. What is the nanny's portion of the Social Security and Medicare tax?$
Henrietta Jones works on Capitol Hill as a legislative assistant and to supplement her income, works as a freelance driver using an app (Lyft). In 2023, she made $ 40.000 in wages from her Capitol Hill job and made $61 ,200 from driving for Lyft (She is an independent contractor). a. What is her 1) taxable income, b. What is her 2) OBI deduction: s. How much self-employment tax does she owe; d. Please prepare draft: 1) Form 1040 Schedule C, Schedule SE and Schedule 1.
Exercise 19-14 (Algorithmic) (LO. 5) Zack, a sole proprietor, has earned income of $36,145 in 2022 (after the deduction for one-half of self-employment tax). What is the maximum contribution Zack may make to a defined contribution Keogh plan? 58,000 X

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