Tanya's employer offers a cafeteria plan that allows employees to choose among a number of benefits. Each employee is allowed $6,000 in benefits. For 2016, Tanya selected $3,300 ($275 per month) of parking, $2,200 in 401(k) contributions, and $800 of cash. How much must Tanya include in taxable income?

Question

Quizplus · Accepted Answer

$1,040 is includable: $240 of parking benefits [$3,300 ($275 × 12) - ($255 excludable amount × 12)] and $800 of cash.

Tanya's Employer Offers a Cafeteria Plan That Allows Employees to Choose