Fringe Benefits

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Fringe Benefits

Medical Savings Accounts

Asked Friday, June 22, 2012 by an anonymous user
Medical Savings Accounts (MSAs) are available to employees of small businesses and self-employed individuals if they participate in high-deductible health plans. The deductible limits and out-of-pocket limits in connection with these plans differ from those for HSAs.
For tax years beginning in 2012, the annual deductible for an MSA high-deductible health plan may not be less than $2,100 and not more than $3,150 for single coverage, and not less than $4,200 and not more than $6,300 for family coverage. Also, annual out-of-pocket expenses (exclusive of premiums) cannot exceed $4,200 for single coverage and $7,650 for family coverage.
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Fringe Benefits

Cell Phones - Employer-Provided

Asked Tuesday, March 06, 2012 by an anonymous user
The value of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a working condition fringe benefit.
Personal use of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a de minimis fringe benefit.
You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone.
You cannot exclude from an employee's wages the value of a cell phone provided to promote goodwill of an employee, to attract a prospective employee, or as a means of providing additional compensation to an employee.
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Fringe Benefits

Meals

Asked Tuesday, March 06, 2012 by an anonymous user
The value of employer provided meals is not taxable if furnished on your employer's business premises for the employer's convenience.
The employer can exclude any occasional meal or meal money he or she provides to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable.
The exclusion applies, for Coffee, doughnuts, or soft drinks, occasional meals or meal money provided to enable an employee to work overtime, occasional parties or picnics for employees and their guests.
Food or beverages the employer furnishes to employees qualify as a de minimis benefit, and can be deducted at their full cost. The 50% limit on deductions for the cost of meals does not apply.
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Fringe Benefits

Lodging

Asked Tuesday, March 06, 2012 by an anonymous user
The value of lodging is not taxable if as a condition of employement the employee must accept the lodging on the employer's business premises for the employer's convenience.
The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging.
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Fringe Benefits

Fringe Benefit Valuation Rules

Asked Tuesday, March 06, 2012 by an anonymous user
You must use the general valuation rule to determine the value of most fringe benefits. Under this rule, the value of a fringe benefit is its fair market value.
The fair market value (FMV) of a fringe benefit is the amount an employee would have to pay a third party in an arm's-length transaction to buy or lease the benefit.
Neither the amount the employee considers to be the value of the fringe benefit nor the cost you incur to provide the benefit determines its FMV.
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Fringe Benefits

Forms 941 and W-2 - Reporting

Asked Tuesday, March 06, 2012 by an anonymous user
The actual value of fringe benefits provided during a calendar year must be determined by January 31 of the following year. You must report the actual value on Forms 941 (or Form 944) and W-2. If you choose, you can use a separate Form W-2 for fringe benefits and any other benefit information.
Include the value of the fringe benefit in box 1 of Form W-2. Also include it in boxes 3 and 5, if applicable.
You may show the total value of the fringe benefits provided in the calendar year or other period in box 14 of Form W-2. However, if you provided your employee with the use of a highway motor vehicle and included 100% of its annual lease value in the employee's income, you must also report it separately in box 14 or provide it in a separate statement to the employee so that the employee can compute the value of any business use of the vehicle.
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Fringe Benefits

Education Assistance Plans

Asked Thursday, March 01, 2012 by an anonymous user
You can exclude up to $5,250 of educational assistance you provide to an employee under an educational assistance program from the employee's wages each year.
Graduate school expenses qualify as well as undergraduate courses.
Payments are tax free provided that the courses do not satisfy the employer's minimum educational standards and do not qualify the student for a new profession.
Educational assistance means amounts you pay or incur for your employees' education expenses.
These expenses generally include the cost of books, equipment, fees, supplies, and tuition. These expenses do not include the cost of a course or other education involving sports, games, or hobbies, unless the education has a reasonable relationship to your business, or is required as part of a degree program.
Education expenses do not include the cost of tools or supplies (other than textbooks) your employee is allowed to keep at the end of the course.
They do not include the cost of lodging, meals, or transportation.
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Fringe Benefits

Fringe Benefits - Overview

Asked Thursday, March 01, 2012 by an anonymous user
Fringe benefits are taxable and included in a recipient's pay Unless the law specifically excludes it.
Fringe Benefits are various non-wage compensations provided to employees in addition to their normal wages or salaries.
The most common of these benefits include health, dental, accident and life insurance, daycare, tuition reimbursement, disability income protection, retirement benefits, sick leave, vacation pay, profit sharing, funding of education and adoption benefit plans.
Normally, employer-provided benefits are tax-deductible to the employer and non-taxable to the employee. The exception to the general rule includes certain executive benefits such as for golden parachute plans.
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Fringe Benefits

Life Insurance - Group term

Asked Thursday, March 01, 2012 by an anonymous user
Premiums paid by employer to recipient are not taxed if policy coverage is $50,000 or less. .
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