Gary contributes $200 a month to a flexible spending arrangement for health care.If Gary is in the 25 percent marginal tax bracket,which of the following is true?

Question

Quizplus · Accepted Answer

With a flexible spending arrangement, Gary is saving on taxes because the $200 is deducted from his gross income before taxes are calculated. Therefore, he will save 25% of $200, which is $50 per month or $600 per year. Therefore, the correct answer is D.

Gary Contributes $200 a Month to a Flexible Spending Arrangement