For the current year her compensation package consists of: $1,075,000
How did this happen?
Compensation package can include an annual salary or hourly wages combined with bonus payments, benefits, and incentives
The calculation of Florence's compensation is deductible by Hazel Corporation is shown below:-
According to Internal Revenue Service as per section 162(m) the deduction limit is = $1,000,000
Non taxable fringe benefits = $75,000
Total Florence's compensation is deductible by Hazel Corporation = Deductible limit as per section 162(m) Internal Revenue Service + Non taxable fringe benefits
$1,000,000 + $75,000
=$1,075,000
Hence, For the current year her compensation package consists of: $1,075,000
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