Chad and Jaqueline Are Married and Have AGI of $150,000

question 70

Multiple Choice

Chad and Jaqueline are married and have AGI of $150,000.In 2019 they adopted a child,while taking advantage of their employer's written adoption assistance program.The adoption cost $9,500,all of which was paid by the employer in accordance with the adoption plan.How much of the employer-paid adoption costs may be excluded from their income?

• A)$0
• B)$5,000
• C)$5,250
• D)$9,500

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Definitions:

Charitable Contributions

Donations or gifts made to qualified organizations, which may be deductible from an individual's income tax.

Flexible Spending Account

A Flexible Spending Account (FSA) is a tax-advantaged account that allows employees to set aside pre-tax dollars for eligible healthcare and dependent care expenses.

Pre-tax Wages

Earnings of an individual before any taxes are deducted.

Unreimbursed Medical Expenses

Health-related costs that are not covered or compensated by insurance or other means.