Joseph is eligible for a nontaxable life insurance benefit with an annual premium of $400 paid entirely by his employer.Assuming Joseph is in a 28% bracket,how much would he have to earn to pay for this benefit with after-tax dollars?

Question

Quizplus · Accepted Answer

To pay for a $400 benefit with after-tax dollars, Joseph would need to earn enough so that after paying 28% in taxes, he would be left with $400. The equation to find this amount is: amount earned - (28% of amount earned) = $400. Solving for the amount earned gives us $400 / (1 - 0.28) = $555.56.

Joseph Is Eligible for a Nontaxable Life Insurance Benefit with an Annual