An employee who will be 40 years old on April 1 receives group-term life insurance coverage...

An employee who will be 40 years old on April 1 receives group-term life insurance coverage of $75,000. How much taxable income must this employee recognize for January 2017?

a.$2.50 b.$2.75 c.$12.75 d.$4.25

Solutions

Expert Solution

Solution: 2.5

Working:

1. Take the employee’s coverage amount, and subtract $50,000, thus 75,000 - 50,000 = 25,000

2. Divide the excess amount by 1000; thus 25,000 / 1000 = 25

3. Multiply it by the monthly cost for 2017 i.e $0.10

Thus 25 * 0.10 = $2.5

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Joe’s salary is $200,000 and he receives a group term life insurance policy equal to two...

Joe’s salary is $200,000 and he receives a group term life insurance policy equal to two times his salary. Presuming the plan is non-discriminatory, how much of the face-value of the insurance policy, if any, is subject to inclusion in his W-2 income? 1. $0 2. $50,000 3. $150,000 4. $350,000

Your employer is considering adding a group term life insurance plan to the employee benefit package....

Your employer is considering adding a group term life insurance plan to the employee benefit package. The premium cost would be fully paid by the organization. Explain how this will impact: the employees' net pay the employer's payroll costs

Payroll. Your employer is considering adding a group term life insurance plan to the employee benefit...

Payroll. Your employer is considering adding a group term life insurance plan to the employee benefit package. The premium cost would be fully paid by the organization. Explain how this will impact: 1. the employees' net pay, 2. thew employer's payroll costs

Group Term Life Insurance Many employers limit providing employer-paid Group Term Life Insurance to $50,000. The...

Group Term Life Insurance Many employers limit providing employer-paid Group Term Life Insurance to $50,000. The IRS allows the $50k limit without assessing a tax on the value of this benefit. For a life insurance benefit in excess of $50k, the affected employee will have to include as income and pay income taxes. So some employers avoid the administrative chore of calculating the excess benefit and adding it to the employee’s annual W-2. A consequence to those employers may be...

I am 28 years old, you can make assumptions Life Insurance Obtain a term life insurance...

I am 28 years old, you can make assumptions Life Insurance Obtain a term life insurance quote on yourself and compare it to a whole life insurance quote on yourself. Based on what you've read about life insurance, which would be better for you? Auto Insurance Obtain a liability insurance quote on the car that you would like to own. Compare that quote to one with liability & collision. Compare that quote to one with liability, collision, & comprehensive How...

A life insurance company sells a $250,000 1-year term life insurance policy to a 20-year old...

A life insurance company sells a $250,000 1-year term life insurance policy to a 20-year old male for $350. The probability this person survives the year is 0.98734. Compute the expected value of this policy to the insurance company to the nearest 0.01.

Life Insurance: A life insurance company wants to estimate the probability that a 40-year-old male will...

Life Insurance: A life insurance company wants to estimate the probability that a 40-year-old male will live through the next year. In a sample of 7000 such men from prior years, 6993 lived through the year. Use the relative frequency approximation to estimate the probability that a randomly selected 40-year-old male will live through the next year. Round your answer to 4 decimal places. P(he lives through the year) =????

Life Insurance:A life insurance company sells a$250,000 1-year term life policy to a 20-year-old...

Life Insurance:A life insurance company sells a $250,000 1-year term life policy to a 20-year-old male for $350. According to the National Vital Statistics Report, the probability that the male survives the year is 0.998734.Please answer all questions and do not hand write your answers. Show your work or please leave the question for someone who can. Thank youa)Compute the expected value.b)Interpret the expected value of this policy to the insurance company.

1. Judy is covered by a $200,000 group-term life insurance policy of which her daughter is...

1. Judy is covered by a $200,000 group-term life insurance policy of which her daughter is the sole beneficiary. Judy’s employer pays the entire premium for the policy, for which the uniform annual premium is $0.75 per $1,000 per month of coverage. How much, if any, of the cost of the group-term life insurance is excluded from Judy’s gross income on an annual basis? PLEASE SHOW WORK

1. Which of the following statements concerning the waiver-of-premium provision for group term life insurance is...

1. Which of the following statements concerning the waiver-of-premium provision for group term life insurance is correct? A. The employee can be partially disabled. B. The employee must submit evidence of continuing disability every time he or she files a claim. C. The disability must commence within 12 months after the employee ceases to be insured under the master contract. D. The disability must commence prior to some specified age, such as 60.

Subjects