Lori’s marginal income tax rate is 24%, and her FICA/medicare tax rate is 7.65%. Her employer offers her the choice between $5,000 additional cash salary or a nontaxable fringe benefit. Lori would have to pay $3,200 to purchase the benefit directly. Which of the following statements is true?

Which of the following statements about worker classification is true?

Helen makes quilts and sells them at the regional county fairs. This year, she earned $950 from quilt sales and spent $3,300 on supplies and travel relating to her quilting activity. If the IRS determines that this activity is a hobby instead of a business, Helen can’t deduct any of her $3,300 expenses.

Jason is single, earns $50,000 of salary, and does not participate in his employer’s qualified retirement plan. Jason makes a contribution to his Roth IRA. He can deduct the contribution when calculating AGI.

Helen makes quilts and sells them at the regional county fairs. This year, she earned $950 from quilt sales and spent $3,300 on supplies and travel relating to her quilting activity. If the IRS determines that this activity is a hobby instead of a business, Helen can’t deduct any of her $3,300 expenses.

Which of the following statements about worker classification is true?

Charles owns stock in Sentry, an S Corporation, and an interest in OTW Partnership. Both are passive activities for Charles. He has the following income and loss for the year: Salary, $66,800, Interest and dividends, $1,200 Business Loss from Sentry $(19,400), Business Income from OTW $17,000. Compute Charles’ AGI.

A negligent driver seriously injured Leah. The court awarded her $200,000 for her physical injuries and $300,000 as punitive damages. Leah must include $300,000 in gross income.

An employee has $110,000 of group term life insurance coverage. The cost of this coverage to his employer is $90. The cost based on the IRS’s premium table is $1.08 per year per $1,000 of coverage. What amount is taxable to the employee?

Which of the following conditions of pregnancy is/are considered a medical emergency?