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262 Cards in this Set
- Front
- Back
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Social Security Limit |
132,900 |
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Medicare Limit |
200,000 after 200,000 .9% surtax |
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Situational Leadership |
Task Behavior-guidance Relationship Behavior-support |
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Stages of Team Development |
Forming Storming Norming Performing |
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Foreign Earned Income or Housing Cost Exclusion |
Federal income tax not withheld from employees wages if employer reasonably believes that the wages will be excluded from employees income under the foreign earned income or housing cost exclusion. |
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Form 673 |
Statement For Claiming Exempyion From Withholding |
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Wages not subject to foreign income tax withholding |
Employer is not required to withhold federal income tax from an expatriates wages if employer is required to withhold foreign income taxes from wages. |
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Wages for work in US possessions other than Puerto Rico |
80% of wages paid to employee in possession other than Puerto Rico no withholding of federal income tax. |
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Wages for work in Puerto Rico |
Bona fides resident for entire year wages are not subject to federal income tax. |
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Physical presence test |
Physically present 183 days in the last year. 549 days during the last three year period consisting of current year and two preceding years. Spend no more than 90 days ing the US during the year. Spend more time in the possession and do not have more than 3000 in US earned income. No significant connection to US. |
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Totalization agreements |
Agreement with Australia, Brazil, Canada, Chile, Japan, South Korea, and Uruguay Expatriate working temporarily in the foreign country up to five years. Subject to social security and medicare only. |
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Form 2032 |
Contract coverage under Title II of Social Security Act. |
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Foreign earned income and housing cost exclusion |
Expats working outside the US can exclude 105,900 of foreign earned income from gross income. No federal income tax withheld. Qualify with: Foreign earned income Tax home in foreign country Bona fides residence or physical presence test |
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Foreign Tax Home |
In a foreign country for entire period of residence or physical presence. Principal place of employment or business. No principal place tax home is employees place of abode. |
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Temporary assignment |
Lasting up to one year. |
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Bona Fide Residence Test |
Employer brings family and intend to make foreign country their home Purchase of home or long term lease Involvement in culture Terms of employment agreement Type of Visa or residence permit |
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Form 2555 |
Foreign Earned Income submitted by employee with personal tax returns |
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Domicile |
Place where employee intends to return to. Not necessarily same as employee's residence. |
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330 days during any consecutive 12 month period |
Physical Presence Test. Days do not have to be consecutive. Employee determines 12 month period. |
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Minimum Time Requirement |
Waived if employee is forced to leave because of civil unrest, war or adverse conditions. |
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Foreign Earned Income Exclusion |
105,500 can be excluded from gross income. |
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Foreign Earned income excludes |
Pension or annuity payments Payments from federal government Amounts already excluded for meals and lodging Employer contributions to a nonexempt employee trust Amounts received more than one year after close of taxable year in which earned |
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Foreign Source Income |
Determined by where the employee performed the services |
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Determining source income |
Number of days worked in US divided by total number of days worked x total income equals US source income. |
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Moving Expense Reimbursements |
Include moving expense in foreign earned income. Military personnel excluded. |
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Foreign Housing Cost Exclusion |
Qualify under physical presence test or bona fide residence can exclude a limited amount of reasonable expenses paid. |
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Base Housing Amount |
16% of the maximum foreign earned income exclusion |
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Housing cost exclusion limitation |
30% of maximum foreign earned income exclusion. |
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Employer provided meals and lodging |
Exclude value of meals and lodging provided by the employer if provided for the convenience of the employer. |
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Form 6166 |
Certification of US Residency |
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Form 8802 |
Application for United States Residency Certification |
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Shadow Payrolls |
Facilitates local tax withholding for an employee who is working abroad and paid under a tax equalization plan. |
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Domicile |
Where the employee votes, maintains a residence,family lives and children go to school,owns a new abode or short term lease, where the employee returns after vacation,state issuing drivers license,bank accounts and business association. |
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Resident Alien |
Taxed on worldwide income and are treated the same as US citizens. |
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Non Resident Alien |
Taxed only on income from US sources. |
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Form 8843 |
Statement for Exempt Individuals and Individuals With a Medical Condition. |
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Form W-4 |
Employee's Withholding Allowance Certificate. |
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Form I-9 |
Employment Eligibility Verification |
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Resident Alien working abroad |
Entitled to income exclusion but not entitled to exclusions under bona fide residence test. |
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Individual Taxpayer Identification Numbers |
Assigned to aliens who cannot obtain an SSN. Begins with a 9. |
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Form W-7 |
Application for IRS Individual Taxpayer Identification |
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Form 13551 |
IRS Application to Participate in the IRS Acceptance Agent Program |
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Form W-7 (COA) |
Certificate of Accuracy for IRS Individual Taxpayer Number |
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1042-S |
Foreign Person's US Source Income Subject to Withholding. |
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Form 4419 |
Application for Filing Information Returns Electronically |
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IRS Fire System |
Electronic filers are required to file information returns through the Fire system. A paper 1042 must be filed with the IRs even if 1042-S forms are filed electronically. 1042-t should bot be filed electronically. |
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Form 8809 |
Application for Extension of Time to File Information Returns |
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Form 7004 |
Application for Automatic 6-month Extension of Time to File Certain Business Income Tax Information and Other Returns |
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Form 943 |
Employer's Annual Federal Tax Return for Agricultural Employers |
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Backup Withholding |
24% |
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Immigrant Visas |
"Green Cards" are issued to foreign nationals entering the US as lawful permanent residents. |
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I-551 |
Permanent Resident Card |
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B-1 Visa |
Visitors for business |
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D-1 |
Foreign crewman |
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E-1 |
Treaty Traders |
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E-2 |
Investors |
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E-3 |
Specialty Occupations |
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F-1 |
Students |
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H1-b |
Specialty workers-college educated or experienced professionals in specialty occupations and fashion models. |
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J-1 |
Exchange visitors. Valid 1-5 years. Exempt from social security, medicare and FUTA taxes. |
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L-1 |
Intracompany transfers |
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L-1 |
Nonacademic or vocational |
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O-1 and O-2 |
Extraordinary ability |
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P-1 |
Entertainer, athletes |
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Q-1 |
Cultural Exchange visitors |
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R-1 |
Religious occupations |
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TN |
NAFTA Professionals |
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Service Level Agreements |
A contract with third party providing services. |
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Objectives of a payroll system |
The employee it pays Other departments in the company Company's leadership Federal, state, and local government agencies |
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Interfacing |
Working with other systems and departments |
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Integrated system |
Elimstes double entry |
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Reasons for integrating |
Supports streamling of payroll, human resources, and benefits functions Provides real time data Provides a more secure database |
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Application Service Provider (ASP) |
Collects information from the employer, enters in their payroll system, cuts checks etc |
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Software as a service(SAAS) |
Provides the payroll department an application to perform the payroll functions. |
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ERP |
Enterprise Resource Planning |
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Project Team to analyze need for new system |
Payroll HR Benefits A/P Accounting Tax Risk or compliance Budget/Finance Data processing Senior management |
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Needs and wants analysis |
Document current system and issues. Current situation analysis. |
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Request for proposal(rfp) |
Asks for bids from potential vendors of hardware or software. |
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Gap analysis |
Functionalities of the old and new system are run together. Dual payrolls. Check to make sure taxes and group term life are calculating correctly. |
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Controls and Security for the payroll system |
System edits Periodic data auditing and sampling Batch controls Correction procedures Balancing and reconciliation |
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System documentation |
Document processes and procedures. |
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FASB |
Financial Accounting Standard Board sets the standard for recording financial transactions. |
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GASB |
Governmental Accounting Stards Board sets standards for public sector. |
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GAAP |
Generally Accepted Accounting Principles. Business entity concept Continuing concern concept Time period concept Cost principle Objectivity principle Matching principle Realization principle Consistency principle |
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Business entity concept |
Organization that operates separately is treated as a business under business entity concept. Report financial position on a balance sheet and its profitability on an income statement. |
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Continuing concern concept |
Assumes a business will operate indefinitely as a business. |
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Time period concept |
Organization must determine its accounting period. Can choose the calendar year or another 12 month period. |
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Cost principle |
Assets are recorded at the cost of acquiring them. |
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Objectivity principle |
Transactions must be reported objectively to ensure personal opinions and emotions are not part of the recorded transaction. |
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Matching princiole |
Expenses and revenues are recorded in the accounting period in which the expense is incurred or the revenue is earned. |
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Realization principle |
Governs the recording of revenue. Revenue is recognized when earned. |
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Consistency principle |
Transactions must be recorded in a consistent manner. |
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Double entry Accounting system |
Based on two equations Assets-liabilities=equity |
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Balance sheet |
Company's financial position at a particular point in time. |
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Net income |
Revenue-expenses=net income |
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Equity |
Net income-income distributed+contributed capital=equity |
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Types of accounts |
Asset, liability,expenses, revenue,equity |
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Expense Accounts |
Wages paid to employees Employer paid benefit costs Maintenance for computers Office supply costs Employer share of payroll taxes |
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Liability accounts |
Income and employment taxes withheld Contributions owed to a company benefit plan Accounts payable Wages payable Union dues deducted from pay but not yet paid |
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Asset |
Debit balance |
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Liability |
Credit balance |
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Equity |
Credit balance |
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Revenue |
Credit balance |
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Expense |
Debit balance |
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Income distributed |
Debit balance |
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Contributed capital |
Credit balance |
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Any asset or expense account |
Debit increases Credit decreases |
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Any liability or revenue account |
Debit decreases Credit increases |
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Journal entries |
Record of the transactions of a company during the accounting period. |
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Compound entries |
A journal entry that has more than one debit or credit. |
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General Ledger |
Once entries have been recorded in journal/subsidiary ledger they are posted to the general ledger. |
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Sox |
2002 Public Company Acxounting Teform and Investor Protection Act was enacted in response to corporate scandals. |
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SSAE 16 |
Statement on Standards for Attestation Engagements |
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Positive pay |
Bank sponsored electronic data checking. |
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Check21 |
2004 check clearing for 21st century act |
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FLSA |
Records must be retained for three years from last date of entry: Name, home address,date of birth if under 19,sex and occupation,beginning of employees workweek,regular rate of pay,hours worked each workday,straight time earnings,overtime premium earnings,additions to and deductions from pay,total wages paid,date of payment. Records to keep for three years from last date they were in effect: Collective bargaining, certificates authorizing employment of industrial home workers, minors,learners, students, apprentices, and handicapped workers, records showing total sales and goods purchased. Records to keep for two years of last date of entry: Basic employment and earnings record, order shipping and billing records, records substantiating additions to or deductions from wages. |
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Retain for two years from last effective date |
Wage rate tables and piece rate schedules, work time schedules |
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Hospital employees |
Keep records of time and on which 14day payperiod begins, straight time, overtime earnings paid. Keep copy of written agreement between the hospital and employee. |
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Form 4070 |
Employees report of tips to employer. |
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Records availibility |
Records must be made available within 72hrs of a notice of inspection. |
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Penalties for record keeping violations |
Willful violations can bring criminal charges, penalty of up to 10,000 and imprisonment up to six months. |
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Walsh Healey Act |
Records preserved for five years for government contractors. |
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IRS employee records retention |
Retain 4yrs after the due date or the date the tax is actually paid if later. |
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Information related to taxes paid by employee |
Retain for 4yrs such as W-4 after due date of personal tax return. |
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Allocated tips retention |
At least three years |
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Notice of Inadequate Records |
Willful failure is a misdemeanor punishable by fine of 25,000(100,000) for corporations and/or imprisonment up to one year. |
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Title VII |
Keep for one year from date made or the date of the personnel action. |
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Age Discrimination |
Retain 3years except for one year for job apps, resumes, job orders, job postings,employer administered tests. |
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I-9 |
Retain for 3yrs after date of hire or one year after date of termination whichever is later. |
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1094-c |
Transmittal of Employer Provided Health Insurance Offer. Keep three years. |
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1095-c |
Employer provided health insurance po offer and coverage. |
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1095-b |
Health coverage. |
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Direct Deposit |
Two years from the termination or revocation. |
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Employee Master File |
Name,ssn, dob,etc |
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Involuntary Deductions |
Employer and employee have no control over. |
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668-W |
Notice of levy on Wages,Salary and Other Income. Six parts Part 1 Employers Copy Parts 2-5 given to employee Part 2 Employees Copy Parts 3-5 Employee provides information to employer and IRS Parts 3 and 4 returned to employer within three days of date employer receives form Part 3 Employer sends to IRS Part 4 kept by employer Part 5 Employees copy Part 6 IRS copy Priority over all other garnishments and wage attachments except for child support established before the date of the levy |
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Federal tax levies |
Not subject to CCPA Exempt from levy Unemployment Workers comp Annuity and pension payments under RRTA VA disability payments Certain public assistance Amounts ordered withheld under a previously issued court order for child support |
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Taxpayer Relief Act of 1997 |
Can attach a federal levy up to 15% Federal payments Unemployment Workers comp Annuity and pension payments under RRTA Supplemental social security State or local public assistance |
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Publication 1494 |
IRS tables to figure employee exemptions. New each year. |
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Tax levy amount exempt |
Federal, state and local taxes Involuntary and voluntary deductions in effect prior to levy Increases in deductions(health insurance) Deductions as a condition of employment |
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668-D |
Release of levy/Release of Property from Levy |
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Tax levy penalty |
Liable for full amount required plus interest from wage payment date. Penalty of 50% of amount recoverable by IRS. |
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Form 2159 |
Payroll Deduction Agreement 225.00 user fee Default mandatory 89.00 reinstatement fee |
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Letter 3676 |
Payroll Deduction Installment Agreement Fax Letter |
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Office of Child Support Enforcement |
Responsible for implementation of child support. |
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Maximum to withhold for child support |
CCPA limits 50% of disposable earnings if supporting another spouse or children 60% if the employee is not supporting another spouse or children If employee is 12 weeks in arrears amounts increase to 55% and 65%. |
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Priority of child support withholding |
Take priority over all other garnishments except for federal tax levies. |
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Penalty for not withholding child support |
Liable for the full amount not withheld and any fine set by state law. |
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Hague Child Support Convention |
Effective 1/1/17 states now process cases with other countries that have ratified convention. |
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Multiple child support orders |
State law governs how order must be withheld. If in different states follow laws in state where employee works. Allocate between orders for total amount to withhold or equally towards each order. |
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Medical support orders |
Order to enroll children in insurance and withhold premiums. |
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Creditor garnishments |
When an employee has a debt that remains unpaid a wage garnishment is a legal means to collect on the debt. |
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Consumer Credit Protection Act |
Limits amount that may be garnished. Maximum amount that can be garnished is 25% of disposable earnings. The amount by which the employee's disposable earnings for the week exceed 30 times minimum wage. |
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Multiple creditor garnishments |
If maximum of 25% is already being withheld, additional garnishments may not be withheld. |
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Bankruptcy orders |
When an employee files for bankruptcy creditors are handled by the bankruptcy trustee. When bankruptcy stay is received stop all garnishments except child support. |
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Chapter 13 bankruptcy |
Take priority over any other claim against the employees wages other than child support orders. |
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Retirement plan loans |
Retirement loans cannot be discharged with a bankruptcy filing. |
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Student Loans |
1991 Higher Education Act allows for garnishment on defaulted student loans. 15% of employees' disposable earnings may be garnished or excess over 30 times the federal minimum wage. DE all required deductions and to pay for health insurance. |
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Multiple student loan garnishments |
Can withhold up to CCPA of 25% |
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Grace period for student loans after reemployment |
Employees who lose their jobs and are unemployed within twelve months after termination are given 12 months from date of reemployment before a student loan garnishment order can be put into effect. |
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Federal agency debt collections |
Debt Collect Improvement Act of 1996. CCPA lesser of amount indicated on order up to 15% or amount the disposable exceeds 30 times federal minimum wage. |
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Board, Lodging and other facilities |
Provided by an employer for employees benefit cost may be deducted from employees paycheck. |
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Salary advances or overpayments |
May be deducted even if it brings employee below minimum wage. |
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Wage assignments |
Voluntary agreement by an employee to have a portion of employees wage assigned to a thirty party. CCPA limits do not apply. |
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Omnibus Reconciliation Act of 1993 |
Prohibits taxpayers from deducting charitable contributions of more than 250.00without substantiation of gift. |
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1099-MISC |
Employer provides to independent contractor paid more than 600.00 in a year. |
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Common Law Test |
Right to control work and what work will be done. Behavioral control Financial Control Type of relationship |
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Reasonable basis test |
Court decisions, IRS rulings, technical advice, or a private ruling letter. A past IRS audit. A longstanding practice in a significant segment of employers industey. |
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Reasonable basis Safe Harbor |
Consistent treatment of worker and all similarly situated workers. |
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Form 8919 |
Uncollected Social Security Tax on Wages |
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SS-8 |
Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. |
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Statutory Employees |
Workers who are not employers under the common law test are treated as employees for certain tax purposes. Not subject federal withholding but are subject to medicare and social security. |
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Statutory Nonemployees |
Qualified real estate agents, direct sellers |
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Form 2678 |
Employer/Payer Appointment of Agent |
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Schedule R 941 Filer |
Allocation Schedule for Aggregate Form 941 Filers |
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I-9 |
Employment Eligibility Verification Complete on first day of work May be completed prior if offer has been extended Complete within three business days of hire |
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Form I-766 |
Employment Authorization Document Automatically extend for certain individuals who apply on time to renew their EAD. |
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Form I-797C |
Notice of Action |
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I-9 penalties |
Employ unauthorized aliens 559-4473 first offense 4473-11181 second offense 6709-22363 for more than two offenses Failure to comply with verification requirements fined 224-2236 |
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RIDE |
Records and Information from DMV's for everify |
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Penalties for not.reporting new hires |
25.00 for failure to report new hires 500.00 is maximum for failure to comply |
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Reporting of new hires |
Report twice monthly 12-16 days apart |
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Fair Labor Standards Act |
Sets minimum wage and overtime rates Record keeping Child labor Equal pay for equal work FLSA does not mandate: Vacations,sick days, jury duty,holidays,lunch breaks,or coffee breaks Regulate when employees are paid or when paid after termination Restrict hours for employees under 16 |
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State and federal wage acts |
State law may govern areas not covered by FLSA. Follow state law if more favorable to employee. |
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Enterprise coverage test |
All employees of an enterprise are covered by FLSA if: At least two employees are employed in jobs closely related and directly essential to interstate commerce The business has annual gross sales of at least 500,000 |
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Businesses covered by FLSA regardless of annual sales volume |
Hospitals Nursing homes Elementary and secondary schools Public agencies |
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Individual employee coverage |
An employee is covered by FLSA if he or she is engaged in interstate commerce |
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Exempt employee |
Employees do not have to be paid the required minimum wage or overtime payments Employer does not have to keep detailed time records |
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White collar exemption |
White collar exemptionadminstrative, executive, and computer-related professionals as well as outside salespersonsDetermination depends on:Employees primary dutyEmployees level of discretionary authorityMinimum salary requirement met |
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Non exempt employee |
Earning less than 455/week Entitled to overtime Employees paid over threshold must meet duties test Employees paid more than 100,000 only have to meet one prong of duties test |
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State laws and union contracts |
State laws and collective bargaining agreement do not preempt FLSA |
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Administrative employee exemption |
Directly related to management or general business operations Exercising discretion and independent judgment Risk of financial loss not determinative |
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Blue collar workers and first responders |
White collar exemptions do not apply to manual laborers. |
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Computer related professionals |
Highly skilled professional employees including systems analysts, programmers, software engineers |
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Outside sales employees |
Making sales of tangible or intangible items Obtaining orders or contracts for services Employee must customarily work away from employers place of business |
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Retail and service exemption |
The regular rate of pay on a weekly basis is at least 1.5 times the federal minimum wage More than half of their pay for a representative period comes from commissions. |
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Public Sector Exempt Employees |
Publicly Elected Officials Staff of Elected Officials Official appointed to serve in policymaking position Advisors to elected official on constitutional or legal powers of the office Employed by state or local legislative branch |
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Minimum wage |
All covered employees who are not otherwise exempt must be paid at least minimum wage for all hours worked. |
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Federal contractors minimum wage |
10.60/hr |
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Unifroms |
Employees required to wear uniforms which cannot be worn as regular street clothes and the cost/maintenance would put the employee below minimum wage the employer must pay for the purchase. |
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Tipped employees minimum wage |
2.13/he in wages so long as the employees tips are enough to make up the remainder of the minimum hourly wage then in effect. |
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Tipped employee |
Tips regularly received are more than 30.00 in a month. |
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Consolidated Appropirations Act 2018 |
Civil penalties of 1100.00 can be imposed when employers unlawfully keep employee tips |
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Equal Pay Act |
Equal pay for men and women doing equal work under similar working conditions. |
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Overtime pay requirements |
All covered employees must be paid 1 and half times their regular rate of pay for all hours physically worked over 40. |
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Workweek |
A regularly recurring period of 168 hours (7 consecutive 24-hour periods) |
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Hours worked |
Paid time off for illness, jury or witness duty, holidays, vacations, etc need not be added when determining overtime. |
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Non discretionary bonuses |
Any contractual or agreed upon bonus or incentive related to production, efficiency, attendance, quality or some other measure of performance must be included in the calculation of regular rate of pay. |
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Quarterly/monthly bonuses |
Discretionary bonuses that must be allocated when determined to the workweeks during which they were earned. |
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Not included in regular rate of pay |
Gifts, paid time off and reimbursed expenses, discretionary bonuses, volunteer work counted toward groups bonus, benefit plan contributions |
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Compensatory Time |
Public sector employers can provide comp time instead of cash. Flex time at 1.5hrs. |
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Unauthorized overtime |
Employ-suffer or permit to work. Unauthorized overtime rule must be consistently enforced. |
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Meal and Rest Periods |
Meal periods are not considered working time if the employee is relieved of all duties and responsibilities. Meal must be thirty minutes long to be considered non working time. |
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Travel time |
An employee is home and gets called for emergency and must travel a substantial distance to get there Employee with a special assignment and had to travel outside the regular workday to get there |
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On call time |
Employees who must be on call on the employers premise must paid on call time. |
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Waiting time |
Depends on whether the employee is "engaged to be waiting" or "waiting to be engaged" Time spent "engaged to be waiting" is compensable. |
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Meetings and Trainings |
Work time unless held outside regular working hours Attendance is voluntary Not directly related to employees job Employee does not perform productive work during meeting |
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Donning and doffing |
Time spent changing clothes is work time if it is integral and indispensable to the employees principal activity. |
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Receiving medical attention |
Time spent by an employee receiving medical attention or on the employers premises or at the employers direction is worktime. |
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Child labor restrictions |
FLSA prohibits oppressive child labor No minor under the age of 18 can work in a job that has been declared hazardous. |
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Statute of limitations on complaints |
Up to two years. Three years if willful. |
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Civil and criminal penalties FLSA violations |
1964.00 for each violation Child later 12529 for each violation and 56947 for each violation that causes death. Willful violations can be up to 10000 fine. |
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Walsh Healey Act |
Governs wages of employers or manufacturers and dealers furnishing the feral government with materials, supplies, and equipment. |
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Wages subject to taxation |
IRC all compensation an employee receives from an employer no matter what form it takes constitutes wages subject to federal income and employment taxes. |
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Gross income |
Compensation for services , including fees, commissions, fringe benefits, and similar items. |
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IRC definition of wages |
All remuneration for employment, including the cash value of all remuneration (including benefots) paid as any other medium than cash. |
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Fringe benefits |
Employer provided cars Flights on employer provided aircraft Free or discounted commercial flights Vacations Discounts on property or services Employer paid memberships in country clubs or other social clubs Tickets to entertainment or sporting events Qualified tuition reductions Dependent care deductions No additional cost services Working condition fringes Qualified transportation fringea De minimis fringes |
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Definition of taxable |
It is subject to federal income tax and the employer must withhold the tax from the employees pay and remit to the IRS |
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FICA |
Federal Insurance Contributions Act |
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FUTA |
Federal Unemployment Tax Act |
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Fair Market Value |
Noncash benefits or perks are provided by an employer or its employees, the amount of the benefit is defined as fair market value or what it would cost an individual to purchase benefit on the open market in an arm's length transaction. |
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IFBA = FMA -( EPA +AEL) |
IFBA = Includable fringe benefit amount FMV= Fair market value EPA= Employee paid amount with after tax dollars AEL=Amount excluded by law |
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Non-taxable fringe benefits |
Excluded from fed, med, fica, futa No additional cost services Qualified employee discounts Working condition fringes Deminimus fringes Qualified transportation benefits On premises athletic facilities Qualified retirement planning services |
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No additional cost services |
Free service regularly offered for sale to customers Employer bears no substantial additional cost Employee refers to current and former employees who left because of retirement or disability, their widows, spouses, and dependent children. For air transportation includes parent. Service is available on an equal basis to each member of a group of employees whose classification does not discriminate in favor of highly compensated employees |
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Highly comped |
5% owner of the employers stock or capital if not a corporation at any time during the current or preceding year In 2019 received more than 120,000 in compensation from the employer during the preceding year |
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Qualified employee discounts |
The discount on goods cannot exceed the gross profit percentage when the goods are sold to customers Gross profit percentage is: Total sales-cost of goods sold = total sales Discount on services cannot exceed 20% of the price offered to customers Goods or services must be offered for sale to customers Available on equal terms to all groups of employees Real estate does not qualify for discount. Stocks, bonds currency excluded Employee refers to current and former employees who left because of disability or retirement |
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Working condition fringes |
May be included if: Use is related to employers trade or business Employee able to take business deduction on personal tax return Employee refers to current, partner, director, or independent contractor performing services for employer Employer maintains records to substantiate the business deduction |
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Working condtion fringe definition |
Business use of car or airplane Chauffer or bodyguard provided for security Dues and membership fees for professional organizations Subscriptions to business periodicals Job related education Goods used for product testing by employees Use of demo car by salesman Outplacement services |
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Reimbursement of personal cell phone use |
Employee maintains coverage that is reasonably related to the employers business Must be reasonably calculated Must not be a substitute for regular wages |
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De minimus fringes |
Employer may provide certain benefits certain property and not incled the value in income if: Value of benefit is so small Accounting for it would be unreasonable Frequency benefit is provided to all employees Employee refers to anyone to whomever benefit is provided |
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Deminimus fringe may include |
Typing of personal letters Personal use of company copier Parties and picnics for all employees Tickets to sporting events or theater Traditional holiday gifts with small value Flowers, fruit or similar items provided under special circumstances Donuts provided to employees Use of company telephones for personal calls Meals, supper money, cab fare for employees who must work late Cab fares for employees working other than usual shift Employer eating facility on or near employers premises |
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Gift cards and gift certificates |
Not excluded as de minimus firing benefits equivalent of cash |
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Qualified transportation fringes |
Transportation between home and work provided by the employer if: Vehicle seats at least six including driver At least 80% of the vehicles mileage can be expected for commuting At least half of seating is used by employees |
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Transportation Exclusion |
265.00 Transit passes, vouchers, tokens, or fare cards up to 265 per month Parking provided on or near employers property or at a park and ride facility |
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Qualified bicycle commuting reimbursement |
Suspended 2018-2025 |
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On premises athletic facilities |
Athletic facilty is located on employers premises Operated by the employer through its employees or another entity Use of athletic facility is by employees, spouse and dependent children. Athletic facilty is not a resort or other residential facilty |
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Qualified retirement planning services |
Employers can offer retirement planning services if maintaining a qualified employer plan such as 401k, 403b, 457 |
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Qualified military base realignment and closure fringe |
Certain payments to offset adverse effects on housing values as a result of base closings are not included in income |
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Qualified moving expense reimbursements |
Suspended for years 2018-2025 other than certain moves by military personnel |
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General valuation method |
Fair market value of a company provided vehicle |
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Special valuation method |
The employer reports value of benefits by January 31st of next year The employer includes includes value of the benefit in income within prescribed time The employee is not a control employee The employer demonstrates a good faith effort to treat the benefit correctly |
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Commuting valuation method |
1.50 per one way trip and 3.00 per round trip Vehicle is owned or leased by the employer and provided in connection with employers business Employer requires employee to commute to or from work in vehicle The employer has a written policy The employee is not a control employee |
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Control employee |
Corporate officer earning at least 100,000 Is a director Earns at least 225,000 Is a 1% owner |
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Annual lease valuation |
Fair market value is determined by multiplying the annual lease value of the car by the percentage of personal miles driven Determine fair market value as of first date made available Percentage of miles driven = personal miles driven/total miles driven Calculate fair market value of personal miles driven= annual lease value x percentage of personal miles |
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Employer provided fuel |
5.5 cents per mile or actual cost of fuel |
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Company fleet valuation |
Company has fleet of at least twenty vehicles company can take fair market value of all vehicles 2018 maximum vhf value 50,000 Indexed annually for inflation |
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Vehicle vents per mile method |
Multiply IRS business standard mileage rate by number of miles driven |
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Business standard mileage |
.58 cents per Mile indexed annually |
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Personal use of employer provided aircraft |
Personal air travel can be determined either by general valuation rule or non commercial flight valuation rule |
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General valuation rule |
Personal flight on company plane and employer provides pilot value of what a comparable aircraft and pilot would cost If pilot is not provided value would be amount paid to lease comparable aircfraft |
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Non commercial flight valuation rule |
Calculated by using weight of aircraft and a cents per Mile known as standard industry fare level |
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Free or discounted commercial flights |
25% if the airlines highest unrestricted fare in effect |
