Accounting Question (Employee Benefit Tax Planning)
1. Name and describe 3 fringe benefits that the employer may provide to an employee tax free and what discrimination rules, if any, apply to those benefits. Be sure to specify the code sections that provide the income tax exclusion for the benefit.
EXPLANATION:
Fringe benefit may be defined as perquisites paid to employees
as extra compensation by the employer.
These fringe benefit are usually given to employees to increase
their job satisfaction and their health security.
Example of fringe benefits are: employees discount, Life insurance,
health insurance etc.
The 3 fringe benefit that employer can provide to his employee as
tax free are as follows.
3.Dependent care assistance : Employees are paid fringe benefit for taking care of dependent, who are family members of employee.
The IRS set a limit for dependent care assistance compensation (
limit of $2500, if employee and his wife files separate
returns).
This value of compensation is to be reported by employer in box
number 10 of form number w- 2
Excess payment will be taxable.
Accounting Question (Employee Benefit Tax Planning) 1. Name and describe 3 fringe benefits that the employer...
Name and describe 3 fringe benefits that the employer may provide to an employee tax free and what discrimination rules, if any, apply to those benefits. Be sure to specify the code sections that provide the income tax exclusion for the benefit
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Accounting Question (Employee Benefit Tax Planning) 1. IRC Section 409A has 3 requirements that all nonqualified deferred compensation arrangements must meet in order to avoid noncompliance. What are those requirements?
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