Taxable vs Non-Taxable Fringe Benefits

1. Introduction
2. What’s New - Enforcement Increases! 00:01:12
3. The Big Picture - Artificial Intelligence 00:05:21
4. 1099-NEC 00:17:03
5. 1099-NEC - April 2025 Form 1099-NEC and 1099-MISC 00:22:33
6. Overview -  The Difference Between an Expense Reimbursement and Fringe Benefit 00:32:24
7. Overview  - 1099/W2 Reporting 00:33:43
8. Overview  - Taxable Wages Vs. 1099 Reimbursements 00:47:10
9. Overview  - Non-Taxable Fringe Benefits 00:48:03
10. Overview  - Working Condition Fringes 00:57:45
11. Overview  - De Minimis Fringes 01:04:21
12. Fringes and Reimbursements Issues - IRC Section 274 01:09:23
13. Accountable Plans 01:18:24
14. Accountable Plans - Employee Rules 01:20:57
15. Accountable Plans - Contractor Rules 01:24:31
16. Watch Out For Sneaky Reimbursement Traps! 01:27:58
17. Fringe Benefit/Record-Keeping - Records Must Detail 01:28:47
18. Fringe Benefit/Record-Keeping - Records Must Delineate Expenses 01:33:39
19. Fringe Benefit/Record-Keeping - How Long To Hold Onto Records? 01:34:30
20. Fringe Benefit/Record-Keeping - Independent Contractors 01:34:59
21. Transportation Reimbursed Expenses 01:35:55
22. Transportation Reimbursed Expenses - The Company Car And Executives 01:38:23
23. Wrap Up 01:38:37
24. Protect Yourself 01:34:11
25. Attendee Questions 01:41:40
26. Presentation Closing 01:46:31

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  Steven Mercatante

  Steven Mercatante is the principal and founder of TIR Consulting, LLC. He is a nationally recognized leader in tax reporting education and consulting on specialized compliance issues. He has conducted on-site consultation for corporate clients from across the world and led countless seminars and web [...]

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• Accountable Plan 00:22:21, 00:47:35, 01:18:25, 01:25:17
• Accounts Payable (AP) 00:13:08
• Artificial Intelligence (AI) 00:05:39, 00:11:08, 00:15:44
• Audit 00: 00:02:24, 00:05:59, 01:38:34
• De Minimis 01:04:22, 01:18:37
• De Minimis Fringe Benefits 01:04:21
• Exempt 01:15:57
• Expenditure 01:06:44
• Expense 00:28:38, 00:34:54, 01:10:30, 01:15:01, 01:24:37
• Expense Reimbursement 00:17:09, 00:19:54, 00:22:45, 00:32:21, 00:37:56, 001:18:29, 01:34:48
• Fair Labor Standards Act (FLSA) 00:33:48, 00:35:30
• Fair Market Value (FMV) 00:39:03, 00:43:03
• Federal Insurance Contributions Act (FICA) 00:33:21, 00:42:17
• Federal Unemployment Tax Act (FUTA) 00:33:21
• Form 1099- MISC00:18:19
• Form 1099-NEC 00:17:14, 00:21:07
• Form W-2  00:22:25, 00:41:32, 00:58:57, 01:04:10
• Fringe Benefits 00:00:10, 00:01:35, 00:05:07, 00:17:08, 00:19:52, 00:22:45, 00:34:44, 00:41:19, 00:47:12, 00:58:41, 01:15:46, 01:28:46
• General Services Administration (GSA) 01:23:13
• Golden Parachute Payment 00:18:49
• Independent Contractor 00:22:07, 00:27:56, 00:29:36, 00:33:29, 00:47:46, 01:06:28
• IRC Section 132 00:35:38, 00:52:44, 01:06:53, 01:18:38
• IRC Section 274 01:09:23
• Limited Liability Company (LLC) 00:41:03
• Nexus 00:38:49
• Non-Profit Organizations (NPO) 00:29:22
• Per Diem 01:23:04
• S Corporation 00:41:02
• Section 127 Plans 00:52:50
• Tax Cuts and Jobs Act 00:30:29, 01:09:29
• Tax Gap 00:03:27
• Tax Home 00:24:15
• Travel Expense 00:25:57
• Vendor 00:47:20, 01:06:27
• Wage 00:29:27, 00:40:58, 00:47:17
• Working Condition Fringe Benefit 00:35:34, 00:51:54, 00:56:19, 01:18:31, 01:28:38, 01:34:45

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.

Accounts Payable (AP): The amount of money a company owes creditors (suppliers, etc.) in return for goods and/or services they have delivered.

Artificial Intelligence (AI): Artificial intelligence is intelligence demonstrated by machines, as opposed to the natural intelligence displayed by humans or animals.

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.

Exempt : Exempt employee is a term that refers to a category of employees set out in the Fair Labor Standards Act. They do not receive overtime pay, nor do they qualify for the minimum wage

Expenditure: An expenditure is money spent on something. Expenditure is often used when people are talking about budgets.

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)

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-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. (www.shrm.org)

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/)

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.

Golden Parachute Payments: Golden parachute payments are payments of compensation made to individuals whose companies experience a change in control

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.

Nexus: The term nexus is used in tax law to describe a situation in which a business has a "nexus" or tax presence in a particular state or states. A nexus is basically a connection between a taxing jurisdiction, like a state, and an entity like a business that must collect or pay the tax.

Non-Profit Organizations (NPO): A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrary with an entity that operates as a business aiming to generate a profit for its owners.

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)

S Corporation: An S corporation, for United States federal income tax, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes.

Section 127 Plans: A Section 127 plan (“127 plan” or “127c plan” for short) is the official written legal document that outlines the terms of and governs a company's Educational Assistance program (EAP).

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 Gap: The gross tax gap is the difference between true tax liability for a given tax year and the amount that is paid on time. It is comprised of the nonfiling gap, the underreporting gap, and the underpayment (or remittance) gap.

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.

Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.

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.