Bill was severely injured when he was hit by a car while jogging. He spent one month in the hospital and missed three months of work because of the injuries. Total medical costs were $54,000. Bill received the following payments as a result of the accident: His employer-provided accident insurance reimbursed him for $43,200 of the medical costs and provided him with $3,800 in sick pay while he was out of work.
A private medical insurance policy purchased by Bill paid him $10,800 for medical costs.
His employer gave Bill $7,200 to help him get through his re-habilitation period.
A separate disability policy that Bill had purchased paid him $3,800.
How much gross income does Bill have as a result of the payments received for the accident?

$11,000

Explanation:

In order to calculate gross income for the payments received as a result of the accident, we will consider the amount provided by Bill's employer as a result of being out of work and add it with money provided for rehabilitation process.

In this case, the sick during out of work is $3,800 and amount for rehabilitation period help is $7,200. Hence, the gross income is $11,000.

Note: The medical reimbursement are not taxable and are therefore not calculated as an individuals gross income.

The bigger a decision is, the longer it is going to affect your life. You want to make sure you are making a decision that will positively affect your life. If you make a decision that turns out to be a bad one, you may have to regret it for a very long time.

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