Federal Taxation help

timer Asked: May 14th, 2015

Question description

Faye is a marketing manager for Healthy Corp.  She earns a salary of $100,000 and has received the following benefits during 2012:

• Healthy pays 75% of all employees' health and accident insurance coverage. Healthy paid $6,000 towards the cost of Faye's health insurance during the year.

• Faye participates in the cafeteria plan and had elected to have $2,000 withheld from her pay to cover the remaining cost of the health insurance premiums and an additional $1,500 to cover dental and other health care costs not paid by insurance (i.e. funding a flexible spending account).  The full $1,500 was used to pay for various qualifying medical cost.

•  Healthy pays the cost of disability insurance coverage for all employees.  The insurance will pay 75% of salary if employees are out of work for a significant period.  The cost of Faye's premiums  was $600.

• Healthy pays for the cost of veterinary insurance for all employees.  The cost of coverage for Faye's dog was $400.

• Healthy pays for the cost of daycare for its employees' children.  The cost for Faye's two children was $8,000.

• All employees receive a 20% discount on Healthy's products.  The typical markup on their products is 25%.  Faye enjoyed $1,200 of savings through the discount program.

• Faye won the manager of the year award earlier in the year and received an all-expense paid week at a desert spa valued at $3,500.

• Healthy pays Faye's annual membership dues of $500 to the American Marketing Association.

• Healthy paid for the full $2,500 cost of Faye's attendance at the American Marketing Association's annual conference in Orlando.

How much income must Faye recognize from her employment?

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