Substantiating Employee Meal Expense Reimbursements.De Minimis Exclusion for Occasional Meal Reimbursement.Meals or Lodging Furnished With a Charge.Lodging: "Required as Condition of Employment"."On the Business Premises" of the Employer.Included in the Guide is a discussion of the following: Meals and lodging – In general, the fair market value of meals or lodging furnished to an employee by an employer may be nontaxable to the employee if the rules of Code section 119 are met.Moving expenses – In general, moving expenses incurred to change residences are considered personal expenses and are to be included in an employee’s wages unless the move is directly related to work and the expenses meet the criteria in the Code.Substantiation Methods - Transportation Expenses.Per Diem Rules, Federal Per Diem Rate, Other Per Diem Methods.Away From Tax Home – The Overnight Rule.Transportation expenses, which are distinct from commuting costs, are costs for business travel and are also generally excludable from income. ![]() Travel and Transportation Expenses – Qualifying expenses for travel are usually excludable from an employee's income if they are incurred for temporary travel on business away from the general area of the employee's tax home.The service must be offered to customers in the ordinary course of business in which the employee performs substantial services. No-Additional-Cost Fringe Benefits – In general, services provided to employees that do not impose any substantial additional cost to the employer may be excludable as a no-additional-cost fringe benefit, such as qualified employee discounts.The value of de minimis fringe benefits is determined by the frequency provided to each individual employee, or if this is not administratively practical, by the frequency provided to the whole workforce. De Minimis Fringe Benefits – These benefits include property or services provided by an employer for an employee that has small value and accounting for it is unreasonable or administratively impractical thus, the value of such benefits are generally not includable in income.Safe Harbors for Substantiating Expenses and Excess Reimbursements.The Guide includes a discussion of the following: However, there are many special rules and elections for different benefits. Accounting Rules – In general, taxable fringe benefits are reported when received by the employee and are included in employees' wages in the year the benefit is received.However, cash will never qualify as a de minimis fringe benefit. An example of a de minimis benefit might be employer provided coffee or an occasional ticket to a sporting event. ![]() In addition, certain fringe benefits may be excludable as de minimis due to the small value and the impracticality of accounting for such amounts. Fringe benefits may be completely taxable (e.g., bonuses are always completely taxable), non-taxable (e.g., medical care premiums paid by an employer), partially taxable (e.g., benefits with specific dollar exclusions such as the public transportation subsidy) or deferred taxation (e.g., retirement benefits under a 401(k) plan). Fringe benefits are generally valued at fair market value for tax purposes. In general, fringe benefits are taxable to employees as wages unless a specific exclusion is provided for in the Code. While written primarily for federal, state and local governments, the guide nevertheless provides valuable information about the taxation of various fringe benefits. The Guide covers issues associated with the taxability, withholding and reporting requirements associated with employee fringe benefits. The IRS recently posted to its website a 91 page updated guide to fringe benefits entitled: "Taxable Fringe Benefit Guide" (the "Guide"). In recent years the Internal Revenue Service (the "IRS") has begun to pay more attention to the taxability of fringe benefits and the adherence by employers to the requirements set forth in the Code or the Regulations. Although many fringe benefits may not be subject to taxation, certain requirements set forth in the Internal Revenue Code (the "Code") or the Regulations must be met in order for such benefits to be excludable from ordinary income but deductible by the employer. These can range from simple items such as a Christmas ham to more complex items such as the use of an employer provided vehicle or aircraft. Almost all employers offer some type of fringe benefits to their employees.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |