Question

Discussion Question #1a

For a reimbursement or allowance payment to be considered an accountable plan and therefore not be considered wages or subject to social security taxes, identify and discuss three requirements needed.

Discussion Question #1b

1. Discuss and identify the amounts for the wage limits, surtax and floors for 2019 for the following taxes to be withheld from employees.
   1. Social Security
   2. Medicare

Answer 1

In accountable plan the reimbursement would be Considered non-tanable to the Employee The Expenses veimbursed in the Accountable plan are not considered wages and are not Subject to withholding of tau and payment of income, Social Security, Medicare, and 1 FUTA tanes. However, if any of the three requirements are not met, the rambursement or allowance is Considered income and are thes Sulzfect to applecable tanes. 1. Further, in order to the eligible to continue with the accountable place the following Criteria should I be met. * The Employee must have paid or incurred deductible - enpenses while performing Serurces * The Employee must SubstanHeate these expenses to you within a reasonable period usually permitted by IRS within to days. The Employee must return any amounts more than Substained expenses within a reasonable persod, usually permitted by IRS within 120 days.

1 bi As a part of your payroll loves the lederal goet requinas employer to collect the FI CA (Federal Insurance Corporation Act) han. The lou includes two seperate lanes Social Securely tau and medicare lan. Social Security fan! * The Current tau role for the Social Security is 6 - for employer and 6.2% for employees or 12.4% tolal. * Social Security wage base will be 1,32,900 * So an endevidual with wages upto or above the mounism 1. in 2019 would pay 8239.80 in tan and the employer . pay an equal amount. Medecare tani * Medicare tan valle is 2.9%. Employer and Employee splet That Cost with each paying 1.45% *The Affordable Care Act added an entra Medicare han for high corner. This sonfante Surlan is known as additional - Medicare fan Anyone with earned Income of more than 2,00.000 (2,50,000 Jant Couples feling jointly) hoy to pay an addelforal 0.9% Pon Medicare lames beyond the Standard 1.450%. * There is no wage bose kmits for Medreare fan all - Covered wages are subject to Medicare tau.