Final answer:
Janai's taxable income for 2022 would be $33,600, which is calculated by multiplying her monthly long-term disability payments by 12 months. Because she paid after-tax premiums, these disability payments are considered taxable income.
Step-by-step explanation:
Janai's taxable income for 2022, assuming she had no other income besides the disability policy payments, would be $33,600. This is calculated by multiplying the monthly payment amount by the number of months she received the payments in 2022 ($2,800 per month x 12 months). Therefore, her taxable income would be the same as the policy payout, which is $33,600. However, since she retired in December 2021 and had no other income for 2022, her taxable income would be prorated based on the number of months she received the disability payout
Long-term disability payments are generally taxable when the premiums are paid with after-tax dollars, which seems to be the case for Janai. However, if Janai had paid those premiums with pre-tax dollars, the disability payments would be tax-free. Since the question mentions that the premiums for the disability policy were paid after-tax, the disability benefits Janai received would be considered taxable income.
Therefore, given that this was Janai's sole income for the year and there is no mention of other deductions or credits, her annual income from the disability policy is $33,600, which would be her taxable income for the year.