Question

In: Accounting

Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three...

Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,000 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $107,600.

1. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year?

Income reported:

2. If Fred’s employer also provides him free housing abroad (cost of $20,000), how much of the $20,000 is excludable from Fred’s income?

Amount to be excluded:

3. Suppose that Fred's employer has offered Fred a six-month overseas assignment beginning on January 1 of next year. How much U.S. gross income will Fred report next year if he accepts the six-month assignment abroad and returns home on July 1 of next year?

Income reported:

4. Suppose that Fred’s employer offers Fred a permanent overseas assignment beginning on March 1 of next year. How much U.S. gross income will Fred report next year if he accepts the permanent assignment abroad? Assume that Fred will be abroad for 305 days out of 365 days next year. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)

Income reported:

Can you please explain this to me?

Solutions

Expert Solution

Taxable income refers to the amount of income considered to calculate the amount of tax due from a person or from a company for a given tax year. These taxes are (due) paid to the government (federal) and are payable within the given timeframe.

Taxable income includes: Earned income like salary, wages, commissions, etc, and Unearned income like royalties, interest, rents, etc.


Related Solutions

Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three...
Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,000 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $105,900. a-1. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year? a-2. If...
Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three...
Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,000 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $104,100. a-1. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year? a-2. If...
Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three...
Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,000 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $105,900. 1. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year? Income Reported:...
Fred currently earns $9,400 per month. Fred has been offered the chance to transfer for three...
Fred currently earns $9,400 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,400 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $104,100. a-1. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year? a-2. If...
Fred currently earns $9,600 per month. Fred has been offered the chance to transfer for three...
Fred currently earns $9,600 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,600 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $104,100. a. If Fred’s employer also provides him free housing abroad (cost of $20,600), how much of the $20,600 is excludable from Fred’s income? b. Suppose that Fred's employer has offered...
Required information [The following information applies to the questions displayed below.] Fred currently earns $9,000 per...
Required information [The following information applies to the questions displayed below.] Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,000 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $104,100. a-1. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of...
For 2018, John earns $3,000 per month and has three dependent children. He is divorced and...
For 2018, John earns $3,000 per month and has three dependent children. He is divorced and claims five allowances on his Form W-4. Calculate John's withholding using: (1) percentage method and (2) wage bracket method. Do not round your intermediate computations. Round your final answer to two decimal places. Click here to access the withholding tables. Table for Allowances Amount per Circular E. Pay period 2018 Allowance Amount Weekly $ 79.80 Biweekly 159.60 Semimonthly 172.90 Monthly 345.80 Quarterly 1,037.50 Semiannually...
Merger Co. has 10 employees, each of whom earns $2,200 per month and has been employed...
Merger Co. has 10 employees, each of whom earns $2,200 per month and has been employed since January 1. FICA Social Security taxes are 6.2% of the first $117,000 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee.
company has three employees, each of whom has been employed since January 1, earns $3,100 per...
company has three employees, each of whom has been employed since January 1, earns $3,100 per month, and is paid on the last day of each month. On March 1, the following accounts and balances appeared in its ledger. a. Employees’ Income Taxes Payable, $1,200.10 (liability for February). b. EI Payable, $450.51 (liability for February). c. CPP Payable, $795.62 (liability for February). d. Employees’ Medical Insurance Payable, $1,760.00 (liability for January and February). During March and April, the company completed...
Fred is contemplating stealing a car. He works as an auto mechanic and earns $700 per...
Fred is contemplating stealing a car. He works as an auto mechanic and earns $700 per week. The penalty for auto theft is 3 years in prison and a $5,000 fine. The probability of being caught and arrested by police for the crime is 40%. The probability of being convicted and sentenced in the court system for the crime is 75%. What is Fred’s undiscounted expected punishment cost? Select one: a. $10,920 b. $14,490 c. $22,640 d. $34,260
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT