Bill Mason is considering two job offers. Job 1 pays a salary of $43,300 with $5,310 of nontaxable employee benefits. Job 2 pays a salary of $40,500 and $6,380 of nontaxable benefits. Use a 20 percent tax rate.

43,300 * 0.8 = 34,640

34,640 + 5,310 = ?

40,500 * 0.8 = 32,400

32,400 + 6,380 = ?

What does it mean by 401k Investment Vehicles?

To compare the two job offers, we need to calculate the taxable portion of each salary and add it to the nontaxable benefits.

Let's start with Job 1:

Step 1: Calculate the taxable portion of the salary for Job 1.
Taxable Salary = Salary - Nontaxable Benefits
Taxable Salary = $43,300 - $5,310
Taxable Salary = $37,990

Step 2: Calculate the total income for Job 1.
Total Income for Job 1 = Taxable Salary + Nontaxable Benefits
Total Income for Job 1 = $37,990 + $5,310
Total Income for Job 1 = $43,300

Step 3: Calculate the tax for Job 1.
Tax for Job 1 = Total Income for Job 1 * Tax Rate
Tax for Job 1 = $43,300 * 0.20
Tax for Job 1 = $8,660

Now let's move on to Job 2:

Step 1: Calculate the taxable portion of the salary for Job 2.
Taxable Salary = Salary - Nontaxable Benefits
Taxable Salary = $40,500 - $6,380
Taxable Salary = $34,120

Step 2: Calculate the total income for Job 2.
Total Income for Job 2 = Taxable Salary + Nontaxable Benefits
Total Income for Job 2 = $34,120 + $6,380
Total Income for Job 2 = $40,500

Step 3: Calculate the tax for Job 2.
Tax for Job 2 = Total Income for Job 2 * Tax Rate
Tax for Job 2 = $40,500 * 0.20
Tax for Job 2 = $8,100

To compare the net income of both job offers, we need to subtract the tax from the total income:

Net Income for Job 1 = Total Income for Job 1 - Tax for Job 1
Net Income for Job 1 = $43,300 - $8,660
Net Income for Job 1 = $34,640

Net Income for Job 2 = Total Income for Job 2 - Tax for Job 2
Net Income for Job 2 = $40,500 - $8,100
Net Income for Job 2 = $32,400

Therefore, the net income for Job 1 is $34,640, while the net income for Job 2 is $32,400. Based on net income, Job 1 offers a higher salary after taxes.

To compare the two job offers, we need to determine the after-tax income for each offer. Here's how you can calculate it:

1. Calculate the taxable income for each job offer by subtracting the nontaxable benefits from the salary:
- For Job 1: $43,300 - $5,310 = $37,990
- For Job 2: $40,500 - $6,380 = $34,120

2. Calculate the amount of taxes owed for each job offer by multiplying the taxable income with the tax rate (20% in this case):
- For Job 1: $37,990 * 0.20 = $7,598
- For Job 2: $34,120 * 0.20 = $6,824

3. Calculate the after-tax income for each job offer by subtracting the taxes owed from the taxable income:
- For Job 1: $37,990 - $7,598 = $30,392
- For Job 2: $34,120 - $6,824 = $27,296

Therefore, the after-tax income for Job 1 is $30,392 and for Job 2 is $27,296. Based on this calculation, it appears that Job 1 offers a higher after-tax income.