Final answer:
Teresa's annual tax savings due to pre-tax deductions of her health and dental insurance premiums, based on her 28% federal income tax rate, is $1,293.10.
Step-by-step explanation:
To calculate Teresa’s annual tax savings, we need to first determine the total annual cost of her health and dental insurance premiums and then apply her 28% federal income tax rate to this amount since the deductions are made pre-tax.
The monthly health insurance premium is $332.37, and the dental insurance premium is $52.48. To get the annual costs, we multiply each by 12 (months in a year):
- Health insurance: $332.37 × 12 = $3,988.44
- Dental insurance: $52.48 × 12 = $629.76
Next, we add these annual costs together:
Total annual premium cost = $3,988.44 + $629.76 = $4,618.20
Now we apply the 28% tax rate to find the tax savings:
Tax savings = $4,618.20 × 0.28 = $1,293.10
Therefore, Teresa’s annual tax savings due to pre-tax insurance premium deductions is $1,293.10.