Employee Benefits/ Fringe Benefits/Above line Deductions Flashcards
Meals and Lodging furnished for convenience of employer and on employer premises? Taxed or not?
Lodging must be condition of employment (apartment manager living there free, is excluded from income)
Employer-Sponsored Group Term-Life Plan. What coverage amount is tax free?
First $50k is not taxable to employee
Excess coverage is taxable to employee based on Uniform Premium Table
Uniform Premium Table is calculated how?
Age
The premium amount for that age, per thousand per month
Ted gets 2.5x his annual salary of $100k in group term life insurance. $30 per month is deducted from his paycheck for it. What amount is included in his gross income if table rate is $0.20?
First $50k is free, so only look at $200k of insurance
$200k x (0.20/1,000)x 12 months=
$480
His $30/month deduction is $360/year
$480 - $360 = $120 included
Other Non-Taxable Employee Benefits
No-additional-cost services
Working condition fringe benefits
De Minimis Fringe Benefits
Qualified employee discounts (service = 20%; Products = Profit % which is the difference of what they sell if to a customer less the cost to make it)
Qualified Employee Discount: What’s the rule for it to be non-taxable?
Service = 20% max discount
Product = Price they sell it to a customer less the cost to make it (Profit %)
Above Line Deductions
(For AGI)
Losses on sale/exchange of property
Alimony payments if divorced before 2019
Interest on Student Loans
Rental & Royalty property
1/2 Self-Employ tax paid
100% health insurance premiums paid by a self-employed person
Contributions to qualified plans, IRAs, annuity plans, HSAs
Penalty on premature withdrawals from Time Savings accts/deposits (cashing in CD’s early)
Deducting Student Loan Interest
(Above Line, For AGI)
$2,500 regardless of filing status
Can also be used for higher education expenses related to tuition, fees, room & board, necessary fees for people at least half time
Phaseout for single = $75-90k; MFJ = $155-$185k
Above Line Deduction for Trade/Business Expense must be?
Ordinary
(not capital in nature, customary for others in similar biz)
Necessary
Reasonable
Above Line Business Gift Expense deduction amount?
Limited to $25 plus shipping
Above Line Business Entertainment Expense deduction amount?
Can’t deduct entertainment expenses now, Only meals are allowed to deduct after TCJA 2017
50% limit on meals
100% transportation costs
Alimony Above Line Deductions Rules
Is a deduction for AGI if divorce signed on or before 12/31/18
Alimony Received is earned income (provided for IRA funding) if divorced on or before 12/31/18
Can NOT be property settlement for deduction
No longer deductible or Taxable if divorced after 12/31/18
Above Line Deductions: Moving Expenses
No longer deductible under TCJA 2017 except for armed forces moving to duty station
If employer pays/reimburses moving expenses, then amount is included in employee gross income
