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

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 2013,Tanya selected $3,000 of parking,$2,000 in 401(k) contributions,and $1,000 of cash.How much must Tanya include in taxable income?

A) $60.
B) $1,000.
C) $1,060.
D) $4,000.$1,060 is includable: $60 of parking benefits [$3,000 - ($245 excludable amount × 12) ] and $1,000 of cash.

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