Angela's effective federal tax rate is 17%.Last year,she was able to reduce taxable income by contributing $250.00 per semi-monthly paycheck to her tax -deferred retirement account and $72.07 per semi-monthly paycheck to her flexible spending account.How much did she reduce her federal taxes by if her gross semi-monthly pay is $2,819.96?

Effective Federal Tax Rate

The average rate at which an individual or a corporation is taxed by the federal government, calculated by dividing the total tax paid by taxable income.

Tax-Deferred Retirement

Investment accounts, like 401(k)s or IRAs, that allow earnings to grow tax-free until funds are withdrawn, usually during retirement.

Flexible Spending Account

A type of savings account, usually for healthcare or dependent care expenses, that offers tax advantages by using pre-tax dollars.