Kimberly's Employer Provides Her with a Personal Travel Allowance of $10,000

question 29

Essay

Kimberly's employer provides her with a personal travel allowance of $10,000 annually. Her marginal tax rate is 32 percent. Her employer has a marginal tax rate of 21 percent. What is Kimberly's after-tax benefit, ignoring payroll taxes?

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Definitions:

Deferred Tax Asset

A tax benefit that arises from temporary differences between the book and the taxable income, often due to allowances and deductions recognized at different times.

Consulting Fees

Charges imposed by consultants for their professional advice and services rendered to businesses.

Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Account Receivable

Amounts owed to a company by customers for goods or services that have been delivered or used but not yet paid for.