question archive What is the amount of cash that Hunter able to save in 2018 because he chose to take advantage of payroll deductions made available to him by his employer
What is the amount of cash that Hunter able to save in 2018 because he chose to take advantage of payroll deductions made available to him by his employer
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What is the amount of cash that Hunter able to save in 2018 because
he chose to take advantage of payroll deductions made available to him by his employer. Hint: Payroll deductions related to 401(k) contributions only reduce the amount of an employee's taxable wages reported on Form W-2, Box 1 (i.e. employees still owe FICA taxes on the portion of their payroll deductions related to 401(k) contributions). In contrast, payroll deductions related to flexible spending accounts and health insurance premiums reduce the amount of an employee's taxable wages reported on Form W-2, Boxes 1, 3 and 5. Hunters base salary Base salary for 2018 was $101,350 and
$23,668 income taxes were withheld from his paychecks
given the information provided below.
Description
2018 Amount
Non-cash incentive award - all-expenses-paid cruise vacation $4,025
Tax gross-up for the non-cash incentive award $1,375
Payroll deduction - Employee 401(k) contributions $6,081
Payroll deduction - Employee FSA contributions $2,400
Payroll deduction - Employee portion of insurance premiums $1,440
Hunter's marginal tax rate of 24% (income tax rate only) and 31.65% (income tax rate + Social Security tax rate + Medicare tax rate) should be used as applicable for this analysis and your answer should be shown as a positive amount and rounded to ZERO decimal places.
