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15 Cards in this Set

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2010 Ch-3 T/F #22
A car salesman who receives a $1,000 award for having the top sales for the month will have this amount included in his income.
2010 Ch-3 T/F #23
Gifts provided to an employee by his or her employer are excluded from income.
Gifts provided to employees must be included in the employees' income unless they can be excluded as a de minimis fringe benefit or as a gift between relatives that is not based on the employer-employee relationship.
2010 Ch-3 T/F #24
Death benefits paid to an employee's estate or beneficiary upon the death of the employee are excluded from income up to $5,000.
The exclusion was repealed in 1996.
2010 Ch-3 T/F #25
Dismissal pay is included in a terminated employee's income and is subject to federal income tax withholding and social security, Medicare and FUTA taxes.
2010 Ch-3 T/F #26
The cost of traveling from Boston to Germany for a trip that is for both business and pleasure may be deducted in full as a travel expense.
Special rules and limitations apply to combined business and pleasure travel outside the United States. Even though the trip is primarily for business, if the trip has any element of pleasure, the cost of traveling to and from the destination must be allocated between the business and personal portions of the trip.
2010 Ch-3 T/F #27
To qualify for the travel expense deduction, the employee must be away from home from hoem for at least 24 hours.
To deduct travel expenses, an employee must be in travel status. The employee must usually be away from home 'overnight'. Overnight does not literally mean 24 hours. It is a period of time longer than an ordinary work day during which rest or relief from work is required. The deduction may also be available to employees who travel from their residence to a temporary work location and return home on the same day.
2010 Ch-3 T/F #28
If the employee does not maintain adequate records of miles driven, the business standard mileage rate cannot be used in reimbursing the employee for local business travel.
2010 Ch-3 T/F #29
If an employee works at two or more jobs during the same day, the cost of transportation from one job to the other may be treated as a deductible expense.
2010 Ch-3 T/F #30
Wages paid to a deceased employee's estate or legal representative after the employee's dies but in the year of death are subject to social security, Medicare and FUTA taxes.
2010 Ch-03 Review Question#10
Name the two types of deductible moving expenses.
The two types of deductible job-related moving expenses are:
-Transportation and storage of household goods
-Expenses of moving the employee and his or her family from the old home to the new home (not meals).
2010 Ch-03 Review Question#11
What is the difference between an "accountable plan" and a "nonaccountable plan" in relation to the tax treatment of an employee's business travel expense reimbursements?
If a reimbursement is made under an "accountable plan", the amount reimbursed is excluded from income and is not subject to federal income tax withholding or social security, Medicare, and FUTA taxes. If the reimbursement is made under a "nonaccountable plan," the reimbursement or the excess amount is included in income and is subject to federal income tax withholding and social security, Medicare, and FUTA taxes.
2010 Ch-03 Review Question#12
In regards to substantialting employee business expenses, what does the IRS mean by a "pattern of abuse?"
If an employer regularly fails to comply with the requirements for reimbursing or advancing amounts paid or incurred by employees for business expenses, the IRS will consider this a "pattern of abuse" and will treat all payments as being made under a nonaccountable plan.
2010 Ch-03 Multiple Choice#10
For what travel expenses may an employer use the high-low per diem rate instead of the individual federal per diem rate of the locality of travel?
a.Lodging, not just meals and indidentals, and the travel is within CONUS
b.Lodging, meals and incidental expenses, not just meals and incidentals, and the travel is within CONUS
c.Meals and incidental expenses, and the travel is outside CONUS
d.None of the above
b.Lodging, meals and incidental expenses, not just meals and incidentals, and the travel is within CONUS
2010 Ch-03 Multiple Choice#11
Which of the following expenses is a deductible moving expense?
a.The cost of moving household goods
b.Expenses for tempourary living quarters in the new location
c.The cost of fixing up the employee's old residence for sale
d.Pre move househunting expenses.
a.The cost of moving household goods
2010 Ch-03 Multiple Choice#12
David has child and dependent care expenses of $6,500 during 2010, and his employer reimburses him in full during the same year. How much of the reimbursement is taxable to David for 2010?
dNone of it is taxable
a $1,500