Question

Lane is an employee in the office of Salvaggio \& Wheelers, Attorneys at Law, who received the following benefits during 2022 ; - Medical insurance: $270 per month - Commuter pass: $520 per month - Employer-paid membership to Anytime Gym: $95 per year - Dependent care assistance: $4,000 per year Required: What is the total annual taxable amount for Lane's 2022 benefits?

Answer 1

To calculate Lane's total annual taxable amount for 2022 benefits, we need to determine the taxable portion of each benefit and then sum them up. The medical insurance, commuter pass, and gym membership are all fully tax-deductible, resulting in a total taxable amount of $0.

Step-by-step explanation:

To calculate Lane's total annual taxable amount for 2022 benefits, we need to determine the taxable portion of each benefit and then sum them up. Let's break it down:

Medical insurance:

The monthly cost of $270 is fully tax-deductible, so there is no taxable amount.

Commuter pass:

The monthly cost of $520 is also fully tax-deductible, so there is no taxable amount.

Employer-paid membership to Anytime Gym:

The annual cost of $95 is fully tax-deductible, so there is no taxable amount.

Dependent care assistance:

The annual amount of $4,000 may be subject to federal taxes. However, to calculate the taxable amount, we need to know Lane's dependent care expenses and applicable tax rules.

Therefore, the total annual taxable amount for Lane's 2022 benefits is $0, since the medical insurance, commuter pass, and gym membership are all tax-deductible.

Answer 2

Lane's total annual taxable benefit amount for 2022 is potentially $95, which all comes from the employer-paid gym membership, assuming that the other benefits such as medical insurance, commuter passes, and dependent care assistance are non-taxable within certain limits according to tax laws.

Step-by-step explanation:

To calculate the total annual taxable amount for Lane's 2022 benefits at the law firm Salvaggio & Wheelers, we need to determine which benefits are considered taxable. Generally, employer-provided benefits such as medical insurance, commuter passes, and dependent care assistance might be tax-exempt up to a certain limit, and gym memberships might be taxable, depending on specific tax laws.

The monthly benefits for medical insurance are $270, resulting in an annual total of $270 x 12 months = $3,240. The commuter pass costs $520 per month, which annually is $520 x 12 months = $6,240. Employer-paid gym membership fees for the year are $95. The dependent care assistance provided amounts to $4,000 per year. As per tax guidelines, dependent care benefits can be excluded from income up to a limit of $5,000 for married taxpayers or a lower limit for single taxpayers, so we shall consider them potentially non-taxable for this calculation.

Without specific tax law exemptions and limits, we would add up these totals. For the taxable gym membership, since it is a nominal amount, we include the full $95.

To summarize, assuming that medical insurance, commuter benefits, and dependent care fall under tax-exempt limits, only the gym membership would potentially be taxable. Thus, the total annual taxable benefit amount for Lane would be $95 for the employer-paid gym membership.