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CPP / FPC Study Group

CPP / FPC Study Group. Please sign in. Presentation Material Review Test of Section 2. WELCOME !. Review of Answers. It’s Test Time !. 10 minutes ! Federal and State Wage and Hour Laws. Questions ?. THE EXAM. Any Questions ? Concerns ?. Taxable and. NonTaxable. Compensation.

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CPP / FPC Study Group

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  1. CPP / FPC Study Group Please sign in Presentation Material Review Test of Section 2 WELCOME ! Review of Answers

  2. It’s Test Time ! 10 minutes ! Federal and State Wage and Hour Laws

  3. Questions ?

  4. THE EXAM Any Questions ? Concerns ?

  5. Taxable and NonTaxable Compensation Section 3

  6. Overview • Gross Income • Fringe Benefits • Employer Provided Benefits • Other Payments • Withholding and Reporting Taxes • Questions

  7. Gross Income $ • Gross Income • Included wages and benefits • Excluded benefits • Income and Employment Taxes • Fair Market Value • IFBA = FMV – (EPA + AEL)

  8. Fringe Benefits • Nontaxable Fringe Benefits • No-additional-cost-services • Qualified Employer Discounts • Working Condition Fringe • De Minimis Fringe • Qualified Transportation • On-Premises Athletic Facilities • Qualified Retirement Planning Services • Qualified Moving Expense Reimbursement

  9. Personal Use of Employer Provided Vehicles • Exception to Personal Use • De Minimis • Qualified Non-personal Use • Automobile Salespersons

  10. Personal Use of Employer Provided Vehicles Cont’d • Accounting for Use – Valuation Methods • General Valuation Method • Special Valuation Method • Commuting Valuation Method • Annual Lease Valuation Method • Vehicle cents-per-mile Method

  11. Other Fringe Benefits • Personal Use of Employer Provided Aircraft • General Valuation Rule • Non-commercial Flight Valuation Rule • Free or Discounted Commercial Flights • Discounts on Property or Services • Club Memberships • Working Condition Fringe? • Club vs. Organization

  12. Employer Provided Benefits • Life Insurance • Group-term life insurance • Whole life insurance • Split dollar life insurance • Owners

  13. Moving Expenses • Deductibility • Distance Test • Time Test • Deductible (qualified, nontaxable) moving expenses • Transportation of Household Goods • Expenses of traveling from old residence to new residence (excluding meals)

  14. Moving Expenses Cont’d • Nondeductible (nonqualified, taxable) moving expenses • Meals while in transit • House hunting trips • Real estate expenses • Reporting of moving expenses • Deductible • Nondeductible

  15. Educational Assistance • Job-Related • Non Job-Related • $5,250 exclusion Group Legal Services

  16. Business Travel Expenses • Away from home • Temporary • Daily Transportation Expenses • Accountable Plan • Business Connection • Substantiation • Returning Excess Amounts

  17. Business Travel Expenses Cont’d • Nonaccountable Plan • Frequent Flyer Miles • Substantiation vs. Per Diem allowance • Spousal and family travel expenses

  18. Employer Provided Meals and Lodging • Employer Provided Meals • Furnished on employer premise • For the convenience of the employer • Employer Provided Lodging • On the employer premises • For the convenience of the employer • Required as a condition of employment

  19. Adoption Assistance • Dollar Limitation • Income Limitation • Eligible Child • Qualified Expenses • Program Requirements • W2, Box 12, Code T

  20. Break 10 minutes!

  21. Other Payments • Advances and Overpayments • Awards and Prizes • Length of Service • Safety Achievement • Civic and Charitable Awards • Prizes for Retail Salespeople • Back Pay Awards

  22. Other Payments Cont’d • Bonuses • Commissions • Conventions • Death Benefits • Dependent Care Assistance • $5,000 exclusion limitation • Directors’ Fees • Disaster Relief Payments • Equipment Allowance

  23. Other Payments Cont’d • Gifts • Golden Parachute Payments • Guaranteed Wage Payments • Jury Duty Pay • Leave Sharing Plans • Loans to Employees • Military Pay • Outplacement Services • Retroactive Wage Payments • Security Provided to Employees

  24. Other Payments Cont’d • Severance or Dismissal Pay • Strike Benefits • Supplemental Unemployment Benefits • Tips • Uniform Allowances • Vacation Pay • Wages Paid After Death • In same year • In subsequent year

  25. Other Payments Cont’d • Stocks and Stock Options • Stock as compensation • Stock Options • Incentive Stock Options • Stock Purchase Plan • Non Qualified Stock Options • Tax Treatment • Written Statement

  26. Gross Amount of Earnings = Desired Net Payment / (100% - Total Tax %) Desired Net = $5,000.00 Employer Paid Taxes (Gross-Up) 1. Gross Amount of Earnings = $5,000 / (100% - Total Tax %) 2. 25% = Federal Income Tax Supplemental Tax Rate 6.2% = Social Security 1.45% = Medicare 32.65% = Total Tax % 3. Gross Amount of Earnings = $5,000 / (100% - 32.65 %) 4. Gross Amount of Earnings = $5,000 / 67.35% 5. Gross Amount of Earnings = $7,423.90

  27. Withholding and Reporting for Employer Provided Benefits • Cash Fringe Benefits • Non Cash Fringe Benefits • Withholding Methods • Imputed Income • Gross Up • Special Accounting Rule • W2 Requirements

  28. Questions ?

  29. Discussion Time Any questions on: • Prior Topics • Topic this week • Homework Problems

  30. Next Class Topic : Section 4 Health, Accident and Retirement Plans

  31. It’s Calculation Time!

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