Live Webinar

Taxable vs Non-Taxable Fringe Benefits

Webinar Details $219

  • Webinar Date: April 11, 2023
  • Webinar Time: 12:00pm - 1:40pm EDT   live
  • Webinar Length: 100 Minutes
  • Guest Speaker:   Steven Mercatante
  • Topic:   Taxation and Accounting
  • Credit:   CPE 2.0, ATATX 1.5, IRS 2.0
All Access Membership

Employee expense reimbursements are subject to IRS guidelines and can be disallowed as expenses – and even considered compensation to those employees – if not handled correctly. Further, if employee expense reimbursements do not meet IRS guidelines, they may be disallowed as expenses and considered compensation to those employees, leaving the employer responsible for the associated payroll taxes – plus any penalties.

Taxable and nontaxable fringe benefit are scattered throughout the Internal Revenue Code. Benefits can be hid in Sec 274, 162, 119, 132, 127, and 82. Add in numerous Announcements, Notices and Regulations and we have a complex web. This course will concentrate on the development of an Accountable Reimbursement Plan under Sec 274 and accompanying regulations plus recent pronouncements and inflation increases.

Fringe Benefit Examples and How They Relate to W2 and 1099 preparation:

  • Accountable vs. non-Accountable Expense Reimbursement Plans
  • Record keeping requirements of Sec. 274 & Accountable Plans
  • Deductible and Non-deductible Meals
  • De minimis fringe benefits
  • No added cost benefits
  • Cash payments
  • Auto allowances
  • Company vehicles
  • Prizes, awards, gifts

We'll Answer These and Other Questions:

  • What are the taxable and non-taxable wages?
  • Are meal allowances nontaxable?
  • Are travel allowances nontaxable?
  • What other benefits are nontaxable wages?
  • What meals are deductible and nontaxable to employees?

Learning Objectives:

  • Learn what are the taxable and non-taxable wages?
  • Learn what other benefits are nontaxable wages?
  • Learn what meals are deductible and nontaxable to employees?
  1. Introduction
  2. Overview -  The Difference Between an Expense Reimbursement and Fringe Benefit 00:06:21
  3. Overview  - 1099/W2 Reporting 00:13:00
  4. Overview  - Taxable Wages Vs. 1099 Reimbursements 00:20:58
  5. Overview  - Non-Taxable Fringe Benefits 00:21:29
  6. Overview  - Working Condition Fringes 00:45:54
  7. Overview  - De Minimis Fringes 00:47:16
  8. Recent Issues Regarding Fringe Benefits and Expense Reimbursements 00:54:20
  9. Accountable Plans 01:02:33
  10. Accountable Plans - Employee Rules 01:03:14
  11. Accountable Plans - Contractor Rules 01:17:11
  12. Watch Out For Sneaky Reimbursement Traps! 00:18:04
  13. Fringe Benefit Record-Keeping - Records Must Detail 01:29:07
  14. Fringe Benefit Record-Keeping - Records Must Delineate Expenses 01:30:54
  15. Fringe Benefit Record-Keeping - How Long to Hold Onto Records? 01:31:34
  16. Fringe Benefit Record-Keeping - Independent Contractors 01:31:41
  17. Transportation Reimbursed Expenses 01:33:04
  18. Transportation Reimbursed Expenses - The Company Car And Executives 01:33:45
  19. Wrap Up 01:33:37
  20. Protect Yourself 01:38:22
  21. Attendee Questions 01:39:15
  22. Presentation Closing 01:50:36
  • Accountable Plan 01:02:42, 01:17:20, 01:31:49
  • De Minimis 00:38:59, 00:47:22
  • Expense Reimbursement 00:03:32, 00:06:38, 00:57:28
  • Fair Labor Standards Act (FLSA) 00:13:03
  • Fair Market Value (FMV) 00:17:24
  • Federal Insurance Contributions Act (FICA) 00:09:59, 00:36:16
  • Federal Unemployment Tax Act (FUTA) 00:10:00
  • Form 1065 00:09:31
  • Form 1099-MISC 00:03:31
  • Form 1099-NEC 00:03:30, 00:09:27, 01:03:03
  • Form 941 00:06:21
  • Form W-2 00:01:16, 00:09:17, 00:21:15, 00:33:44, 01:03:02, 01:10:37
  • Fringe Benefits 00:01:13, 00:02:56, 00:06:39, 00:17:26 00:18:17, 00:30:35, 00:57:29, 01:21:26
  • Independent Contractor 00:07:27, 00:21:16, 01:17:38, 01:31:44
  • IRC Section 132 00:27:34, 00:55:00, 01:12:15
  • IRC Section 274 00:54:20, 01:18:54, 01:26:04
  • IRC Section 6724 00:19:19
  • IRS Code Section 61 00:18:47
  • Nonresident Alien (NRA) 001:18:12
  • Per Diem 01:05:28
  • Reasonable Cause 00:19:15
  • Resident Alien 01:18:16
  • Tangible Personal Property 01:02:22
  • Tax Cuts and Jobs Act 00:55:19, 00:57:33, 01:26:01

Accountable Plan: An accountable plan is a plan that follows the Internal Revenue Service (IRS) regulations for reimbursing workers for business expenses in which reimbursement is not counted as income. ... However, these expenses must be business-related to fall under an accountable plan.

FATCA: FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. ( FACTA (Fair and Accurate Credit Transactions Act) is an amendment to FCRA (Fair Credit Reporting Act ) that was added, primarily, to protect consumers from identity theft. The Act stipulates requirements for information privacy, accuracy and disposal and limits the ways consumer information can be shared.

Fair Labor Standards Act (FLSA): The Fair Labor Standards Act of 1938 29 U.S.C. § 203 is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits most employment of minors in "oppressive child labor".

Federal Insurance Contributions Act (FICA): The Federal Insurance Contributions Act is a United States federal payroll contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.

Federal Unemployment Tax Act (FUTA): The Federal Unemployment Tax Act (FUTA) is a federal law that imposes an unemployment tax on employers. The FUTA tax funds the federal government's oversight of each state's unemployment program. Only employers pay FUTA tax. You must deposit the tax quarterly and file an annual form.

Form 1065 : A partnership prepares a K-1 to get a sense of what each partner's share of the returns is, based on the amount of capital he has in the partnership. The financial information posted to each partner's Schedule K-1 is sent to the IRS along with Form 1065.

Form 1099-MISC: The Form 1099-MISC is an Internal Revenue Service (IRS) tax return document used to report miscellaneous payments made to nonemployee individuals, such as independent contractors, during the calendar year. (

Form 1099-NEC: In the context of 1099 tax filing, NEC stands for “Nonemployee Compensation” (the first letters of the three words None, Employee and Compensation). Most tax payers recognize NEC as box 7 on Form 1099-MISC. NEC is used to report income paid to independent-contractors / the-self-employed (referred to as 1099 employees for simplification purposes). So, while employers report income that gets paid to employees on Box 1 (Wages, tips, other compensation) of the W2 form, payers report income that gets paid to none-employees on Box 7 (NEC) of the 1099-MISC form. As an individual, if you received form 1099-MISC instead of Form W-2 then the payer did not consider you an employee and did not withhold income tax or social security and Medicare tax.

Form 941: Federal form 941, also called a quarterly federal tax return, is an IRS return that employers use to report their FICA taxes paid and owed for the period. The IRS uses this form to calculate the amount of employer tax payments made during the year as well as the amount of taxes due at the end of the year.

Form W-2: Form W-2 is an Internal Revenue Service tax form used in the United States to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. - Wikipedia (

Fringe Benefits: An extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc.

IRC Section 132: Internal Revenue Code Section 132(a) provides eight types of fringe benefits that are excluded from gross income

IRC Section 274: Section 274(k) generally provides that no deduction is allowed for the expense of any food or beverages unless (A) such expense is not lavish or extravagant under the circumstances, and (B) the taxpayer (or an employee of the taxpayer) is present at the furnishing of such food or beverages.

Independent Contractor: An independent contractor is a person or entity contracted to perform work or provide services to another entity as a non-employee. As a result, independent contractors must pay their own Social Security and Medicare taxes. - Investopedia (

Nonresident Alien (NRA): This income is taxed at a flat 30% rate, unless a tax treaty specifies a lower rate. Nonresident aliens must file and pay any tax due using Form 1040NR, U.S. Nonresident Alien Income Tax Return or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents.

Per Diem: (Latin for "per day" or "for each day") or daily allowance is a specific amount of money an organization gives an individual, often an employee, per day to cover living expenses when traveling for work. - Wikipedia (

Reasonable Cause : Reasonable cause is based on all the facts and circumstances in your situation. The IRS will consider any reason which establishes that you used all ordinary business care and prudence to meet your federal tax obligations but were nevertheless unable to do so.

Tax Cuts and Jobs Act: The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, Pub.L. 115–97, is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs Act, that amended the Internal Revenue Code of 1986.

Guest Speaker

  • Steven Mercatante