Carl Filed His Tax Return, Properly Claiming the Head of Household

question 98

Multiple Choice

Carl filed his tax return, properly claiming the head of household filing status. Carl's employer paid or provided the following to Carl: $\begin{array}{|l|r|}\hline\text { Wages } & \$ 65,000 \\\hline \text { Fair market value of qualified dependent care services } & 4,000 \\\hline \text { Premiums for } \$ 50,000 \text { qualified group term life } & 500 \\\text { insurance } & \\\hline \text { Medical insurance premiums } & 600 \\\hline\end{array}$ How much of this income should Carl report (assume benefits are provided on a nondiscriminatory basis) ?

• A) $65,000
• B) $69,000
• C) $69,500
• D) $70,100

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Definitions:

Internal Rate Of Return

A financial metric used to estimate the profitability of potential investments, calculated as the rate that makes the net present value of all cash flows equal to zero.

Present Value

Today's value of a sum of money or sequence of cash inflows expected in the future, discounted by a certain rate of return.

Desired Rate

The target interest or return rate set by an individual or organization for investments or loans.

Internal Rate Of Return

A financial metric used to evaluate the profitability of an investment, representing the discount rate that makes the net present value of all cash flows from the investment zero.