Chapter 5: Gross Income from Employment

01.Core Concepts

• Khabib’s employer provides him with $80,000 of group term life insurance for which Khabib pays none of the premiums. Khabib is 56 years old at the end of the year. • He can exclude the cost of the first $50,000 of coverage. • $30,000/$1,000 = 30 units in excess of the excluded amount • He must include $154.80 ($30 x $0.43 per thousand per month x 12 months) in his gross income.  This amount is generally reported as part of Khabib’s W-2 income. • If Khabib pays any amount toward the cost of the insurance coverage, the taxable amount will be reduced by the amount of the payment.