Teresa Has a Dental Plan Through Her Employer

question 8

Multiple Choice

Teresa has a dental plan through her employer. Recently, she has undergone dental work costing the plan $2,500. Luckily for Teresa, this particular dental work was covered completely by her dental plan. What are the tax consequences as a result of Teresa not having to pay for the dental work?

• A) Her employer will add the $2,500.00 as an expense in their income statement.
• B) She will have to include the $2,500.00 as additional income.
• C) There are no tax consequences at all as benefits are tax-free.
• D) Teresa will have to claim half of the benefit as income.

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Definitions:

Raphael

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