Linc's Annual Salary Is $80,000

question 71

Multiple Choice

Linc's annual salary is $80,000.His employer,Riddle Corporation,has a qualified pension plan that allows employees to contribute up to 10% of their salaries,which is matched by the employer.Linc and Riddle Corporation each pay $7,500 into the plan.Riddle provides all employees with health and accident insurance by paying 75% of the cost of the policy.Linc's policy cost $3,200.Riddle also offers a flexible benefits plan that employees can use to pay their share of the cost of the medical insurance,other medical costs,and child-care costs.Linc elects to have $2,500 paid into the plan.He uses $800 to pay his share of the medical insurance costs and was reimbursed for $1,700 of medical and childcare costs from the plan.As an officer,Riddle Corporation pays Linc's $3,240 parking cost.Riddle Corporation has a workout room in its office building that is used exclusively by employees and their families.Dues to a comparable facility would be $100 per month.What is Linc's 2017 taxable income from Riddle Corporation?

• A)$70,000
• B)$70,180
• C)$71,500
• D)$71,620
• E)$73,240

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