Question

Horace is an employee of Ace Electric Company. Ace provides all employees with group term life insurance equal to twice their annual salary.

Enter in the "Includable Premium" column the base amount upon which the includable premium will be determined. In the "Premium Taxed" column, enter the amount of premium to be included in Horace's gross income. Refer to the IRS Premium Table to answer the following questions.

Note: If required, round your final answers to the nearest cent. If an amount is zero, enter "0".

Includable Premium Premium Taxed a. Horace is 26 and earns $16,000 per year. $ $ b. Horace is 26 and earns $42,000 per year. $ $ c. Horace is 63 and earns $42,000 per year. $ $ d. Horace is 46 and earns $90,000 per year. $ $

Answer 1

Given on foonnatlich Horace is an employee of Ace electric co. pron all employees with group term life nxorance equcel. tunce the annual salary - The first $50,000 of premium paid on group form life insurance are excluded from gross mcome. The premium paid an coverage an excey of $ so poo must be included in gross income wing IRS premium table 4-1, which gives the cont of life insurance premium per$1000 by age at tax payer. a) Horace in 26 and earns $16000 por year Horace's coverage & is $32,000 (16000XZ) and all premiums paid are excluded fram gross ncome under $50,000 excluniau nule b) Horace in 26 and cons $42000 per year The coverage in 84000 and premium as $34000 (84000 - 50,000) muut be included am gross income tona26 year old, the amount of gross income 9 $24.48 ( 34x$672) c) Horace in 63 and cons $42000 per year. The coverage in $54000 and premiuns as $34000 884000 $50,000) ment be included am grou Ancame. for a 63 year old, the amount of grau mome is $269:28 ( 346 $7.92)

d) Horace is 46 and earns $90,000 per year The coverage in $480,000 and the premium as $630,000 ($180,000 - $50,000) must be anclu am Goron income for a 46 year old. the amount of grou mcome in $234 (130 x81.80) premium mcludable premium taxed a) Hoonace in 26 and cons $16000 per year $32,000 suooo $34,000 6) Horace in 26 and ecoms $42,000 per year c) Horace in 63 and cons $42,000 per year $84000 $34,000 $1.30,000 $1080,000 a) Ho nace in 46 and earns $90,000 per yeas