CPP / FPC Study Group
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Review of Answers
Presentation MaterialReview Test of Section 2
It’s Test Time !
10 minutes !Federal and State Wage and Hour Laws
Questions ?
THE EXAM
Any Questions ?
Concerns ?
Section 3
Overview
• Gross Income• Fringe Benefits• Employer Provided Benefits• Other Payments• Withholding and Reporting Taxes• Questions
Gross Income
• Gross Income– Included wages and benefits– Excluded benefits
• Income and Employment Taxes• Fair Market Value
– IFBA = FMV – (EPA + AEL)
Fringe Benefits
• Nontaxable Fringe Benefits– No-additional-cost-services– Qualified Employer Discounts– Working Condition Fringe– De Minimis Fringe– Qualified Transportation– On-Premises Athletic Facilities– Qualified Retirement Planning Services– Qualified Moving Expense Reimbursement
Personal Use of Employer Provided
Vehicles
• Exception to Personal Use– De Minimis– Qualified Non-personal Use– Automobile Salespersons
• Accounting for Use – Valuation Methods– General Valuation Method– Special Valuation Method– Commuting Valuation Method– Annual Lease Valuation Method– Vehicle cents-per-mile Method
Personal Use of Employer Provided
Vehicles Cont’d
• Personal Use of Employer Provided Aircraft– General Valuation Rule– Non-commercial Flight Valuation Rule
• Free or Discounted Commercial Flights• Discounts on Property or Services• Club Memberships
– Working Condition Fringe?– Club vs. Organization
Other Fringe Benefits
Employer Provided Benefits
• Life Insurance– Group-term life insurance– Whole life insurance– Split dollar life insurance– Owners
Moving Expenses• Deductibility
– Distance Test– Time Test
• Deductible (qualified, nontaxable) moving expenses– Transportation of Household Goods– Expenses of traveling from old residence
to new residence (excluding meals)
• Nondeductible (nonqualified, taxable) moving expenses– Meals while in transit– House hunting trips– Real estate expenses
• Reporting of moving expenses– Deductible– Nondeductible
Moving Expenses Cont’d
Educational Assistance• Job-Related• Non Job-Related
– $5,250 exclusion
Group Legal Services
Business Travel Expenses
• Away from home• Temporary• Daily Transportation Expenses• Accountable Plan
– Business Connection– Substantiation– Returning Excess Amounts
• Nonaccountable Plan• Frequent Flyer Miles• Substantiation vs. Per Diem
allowance• Spousal and family travel expenses
Business Travel Expenses Cont’d
Employer Provided Meals and Lodging
• Employer Provided Meals– Furnished on employer premise– For the convenience of the employer
• Employer Provided Lodging– On the employer premises– For the convenience of the employer– Required as a condition of employment
Adoption Assistance• Dollar Limitation• Income Limitation• Eligible Child• Qualified Expenses• Program Requirements• W2, Box 12, Code T
Break
10 minutes!
Other Payments• Advances and Overpayments• Awards and Prizes
– Length of Service– Safety Achievement– Civic and Charitable Awards– Prizes for Retail Salespeople
• Back Pay Awards
• Bonuses• Commissions• Conventions• Death Benefits• Dependent Care Assistance
– $5,000 exclusion limitation• Directors’ Fees• Disaster Relief Payments• Equipment Allowance
Other Payments Cont’d
• Gifts• Golden Parachute Payments• Guaranteed Wage Payments• Jury Duty Pay• Leave Sharing Plans• Loans to Employees• Military Pay• Outplacement Services• Retroactive Wage Payments• Security Provided to Employees
Other Payments Cont’d
• Severance or Dismissal Pay• Strike Benefits• Supplemental Unemployment Benefits• Tips• Uniform Allowances• Vacation Pay• Wages Paid After Death
– In same year– In subsequent year
Other Payments Cont’d
• Stocks and Stock Options– Stock as compensation– Stock Options– Incentive Stock Options– Stock Purchase Plan– Non Qualified Stock Options– Tax Treatment– Written Statement
Other Payments Cont’d
Employer Paid Taxes (Gross-Up)Gross Amount of Earnings = Desired Net Payment / (100% - Total Tax %)
1. Gross Amount of Earnings = $5,000 / (100% - Total Tax %)
2. 25% = Federal Income Tax Supplemental Tax Rate
6.2% = Social Security
1.45% = Medicare
32.65% = Total Tax %
3. Gross Amount of Earnings = $5,000 / (100% - 32.65 %)
4. Gross Amount of Earnings = $5,000 / 67.35%
Desired Net = $5,000.00
5. Gross Amount of Earnings = $7,423.90
Withholding and Reporting for Employer Provided
Benefits• Cash Fringe Benefits• Non Cash Fringe Benefits
– Withholding Methods– Imputed Income– Gross Up– Special Accounting Rule– W2 Requirements
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Topic : Section 4
Health, Accident
and
Retirement Plans
It’s It’s CalculatioCalculation Time!n Time!
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