On Demand Webinar
Webinar Details $219
- Webinar Length: 100 Minutes
- Guest Speaker: Steven Mercatante
- Topic: Taxation and Accounting
- Credit: ATATX 1.5, CPE 2.0, IRS 2.0
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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?
- Introduction
- Overview - The Difference Between an Expense Reimbursement and Fringe Benefit 00:00:52
- Overview - 1099/W2 Reporting 00:12:02
- Overview - Taxable Wages Vs. 1099 Reimbursements 00:18:20
- Overview - Non-Taxable Fringe Benefits 00:18:20
- Overview - Working Condition Fringes 00:22:53
- Overview - De Minimis Fringes 00:27:02
- Overview - IRC Section 132 00:33:54
- Fringes and Reimbursements Issues - IRC Section 274 00:35:18
- Accountable Plans 00:44:00
- Accountable Plans - Employee Rules 00:55:19
- Accountable Plans - Contractor Rules 00:57:10
- Watch Out For Sneaky Reimbursement Traps! 00:58:54
- Fringe Benefit/Record-Keeping - Records Must Detail 01:00:02
- Fringe Benefit/Record-Keeping - Records Must Delineate Expenses 01:07:27
- Fringe Benefit/Record-Keeping - How Long To Hold Onto Records? 01:09:05
- Fringe Benefit/Record-Keeping - Independent Contractors 01:10:48
- Transportation Reimbursed Expenses 01:11:02
- Transportation Reimbursed Expenses - The Company Car And Executives 01:13:03
- Wrap Up 01:15:32
- Protect Yourself 01:34:37
- Attendee Questions 01:36:26
- Presentation Closing 01:40:01
- Accountable Plan 00:44:02, 00:49:36, 01:05:35, 01:12:53
- Audit 00:48:25, 01:10:58
- De Minimis 00:27:05
- De Minimis Fringe Benefits 00:27:09
- Department of Labor (DOL) 00:12:17
- Expense 00:01:51, 00:14:09, 00:40:08, 00:53:54,01:09:22
- Expense Reimbursement 00:01:27, 00:04:28, 00:13:59, 00:44:15, 00:59:19, 01:15:44
- Fair Labor Standards Act (FLSA) 00:12:20
- Fair Market Value (FMV) 00:15:10
- Federal Insurance Contributions Act (FICA) 00:00:52
- Federal Unemployment Tax Act (FUTA) 00:00:52:
- Form 1099-NEC 00:18:55
- Form W-2 00:02:04, 00:15:23, 00:24:22
- Fringe Benefits 00:00:42, 00:02:20, 00:04:28, 00:08:31, 00:13:59, 00:16:27, 00:24:31, 00:44:15
- General Services Administration (GSA) 00:51:47
- Independent Contractor 00:02:02, 00:18:44, 00:24:13, 00:44:47, 00:56:46, 01:09:11
- IRC Section 132 00:20:19, 00:25:26, 01:05:27
- IRC Section 274 00:35:18
- Limited Liability Company (LLC) 00:52:44
- Per Diem 00:51:32, 00:54:04
- Sole Proprietor 00:53:42
- Tax Cuts and Jobs Act 00:35:25, 00:38:07
- Tax Home 00:04:14, 00:59:57
- Travel Expense 00:02:30, 00:05:37, 00:08:23, 00:59:36, 01:02:04
- Wage 00:17:30, 00:18:27, 00:31:58
- Working Condition Fringe Benefit 00:20:54, 00:21:08, 00:25:21
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.
Audit: A formal examination of an organization's or individual's accounts or financial situation
De Minimis: Too trivial or minor to merit consideration.
De Minimis Fringe Benefits: De minimis fringe benefits are low-value perks provided by an employer; de minimis is legal Latin for "minimal". Perks that are determined to be de minimis fringe benefits may not be accounted or taxed in some jurisdictions as having too small value and too complicated an accounting.
Department of Labor (DOL): The United States Department of Labor is a cabinet-level department of the U.S. federal government responsible for occupational safety, wage and hour standards, unemployment insurance benefits, reemployment services, and some economic statistics; many U.S. states also have such departments.
Expense: Offset (an item of expenditure) as an expense against taxable income.
Expense Reimbursement: Expense reimbursement is a method for paying employees back when they spend their own money on business-related expenses. These expenses generally occur when an employee is traveling for business but can occur in other work-related situations. (www.thebalancecareers.com)
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. (www.treasury.gov). 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".
Fair Market Value (FMV): The term fair market value is used throughout the Internal Revenue Code among other federal statutory laws in the USA including Bankruptcy, many state laws, and several regulatory bodies. In litigation in many jurisdictions in the United States, the fair market value is determined at a hearing.
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 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 (https://en.wikipedia.org/)
Form W-8: Form W-8 is filled out by foreign entities (citizens and corporations) in order to claim exempt status from certain tax withholdings. The form is used to declare an entity's status as non-resident alien or foreign national who works outside of the United States.
Fringe Benefits: An extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc.
General Services Administration (GSA): The General Services Administration is an independent agency of the United States government established in 1949 to help manage and support the basic functioning of federal agencies.
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 (https://www.investopedia.com/)
Limited Liability Company (LLC): An LLC is a corporate structure where members cannot be held accountable for the company’s debts or liabilities. This can shield business owners from losing their entire life savings if, for example, someone were to sue the company. Can be a single member (much like a sole proprietor) or a multi-member. It shares certain traits of both corporations as well as partnerships or sole proprietorships. It is not a corporation.
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 (https://en.wikipedia.org)
Sole Proprietor: A business that legally has no separate existence from its owner. The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.
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.
Tax Home: A tax home is the general locality of an individual's primary place of work. It is the city or general vicinity where his or her primary place of business or employment is located, regardless of the location of the individual's residence.
Travel Expense: Travel expenses are costs associated with traveling for the purpose of conducting business-related activities. Travel expenses can generally be deducted by employees as non-reimbursed costs incurred while traveling away from home specifically for business purposes.
Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.
Working Condition Fringe Benefit: The working condition benefit is a type of fringe benefit employers offer employees. Working condition benefits include property and services employers provide to employees so they can perform their jobs.
