TAX SECTION Given by: John Harabedian Terri Shields

1. TAX SECTION Given by: John Harabedian Terri Shields A component of the Business/Accounting Certificate Program

2. TAX EXEMPT STATUS • Rutgers has dual status as a state instrumentality and also as a 501(c) (3) tax-exempt organization. • In most cases, Rutgers is exempt from state sales tax. Exemption letters can be obtained, if needed, from the Tax Department. • Hotel Occupancy tax

3. Payments to Non-resident Aliens(Processed on a Check Request) • Nonresident vs. Resident for US Tax purposes • US Source Income vs. Foreign Source • Tax Withholding – required unless filing exemption. • Tax Treaties - 8233 Form • Tax ID # requirements (needed for exemption).

4. Relocation/Moving Expenses • Rutgers Policy and Procedures library See number 60.1.6 • Non taxable employee moving expenses: • Actual moving of household goods, one way airline fare per person, or mileage @16.5 cents per mile in 2010, and hotel if traveling on ground. • Taxable moving expenses • Reimbursement for any other moving expenses, including house hunting, meals, storage and temporary housing will be reported as gross wages through Payroll on a W-2 form . A component of the Business/Accounting Certificate Program.

5. TAX DEPT WEBSITE • Taxation Topics • Tax Exemption Letters and Certificates • Tax Links • http://uco.rutgers.edu/tax-services • Senior Tax Accountant - Anelia Dolan (732) 445-4212 andolan@rci.rutgers.edu

6. TABER & AUDIT HISTORY • Original Internal Audit Report • Board of Governor mandate • SCI Report • Other Audits • Job Responsibility • Rutgers Audit Process

7. RU TRAVEL.RUTGERS.EDU • Rutgers Policy 40.4.1 • New travel restriction memo’s • Per diem meal rates-domestic & foreign & IRS rates • Oanda currency conversion-required for all currency uses • Mapquest • RU Travel agencies • TABER Form &Lost receipt form

8. Travel Policy Amendments • State budget travel restrictions • Travel on non state accounts has no policy change • Out of state travel currently not permitted on state account • Amended Policy to be issued • Travel $ pool • State mileage rate of 57.5 cents

9. State Account Restrictions • No travel agency permitted • No cruise ship travel • No meals for 1 day trips • No meals for in state travel • No out of state conference registration or business meals on check request or taber • No overnight travel in NJ

10. “ IRS-Accountable Plan” • Must meet all 3 of the following conditions or the expenses may be taxable to the traveler: • There must be a business connection. • All business expenses must be substantiated (date, amount, place, and business expense being submitted to the employer within a reasonable time period). • Employees are required to return all advance amounts in excess of substantiated expenses. • Unallowable expenses must be deducted at the end of the TABER in the “Less Amount Disallowed” field or simply not recorded on page 1 of the TABER. A component of the Business/Accounting Certificate Program.

11. Travel And Business Expense Reports (TABERS) • Used for requesting reimbursement for employees out-of-pocket expenses incurred while traveling on University business. • Also used to reimburse other University business related expenses such as business meals. • Can be used to purchase small incidental items under $500 according to the purchasing guidelines. A component of the Business/Accounting Certificate Program

12. Purpose of Travel, Travel Incidentals, and Meal Expense Policy (40.4.1) • To make travelers, approvers, deans, directors, and department heads aware of their respective roles and responsibilities when submitting and approving travel and business-related expenses. • More restrictive rules/policies may be specified by the deans, directors, and department heads of individual schools, divisions, departments, and/or by the funding source(s), such as external sponsors. • To ensure that reimbursements made to university employees will not be considered taxable income under IRS regulations by maintaining an “accountable plan”. A component of the Business/Accounting Certificate Program.

13. Travel Advances • Generally requested for hotel deposit, transportation, meals & incidentals. • Must use the Travel Advance Form (TAF) available on the RIAS website • Requests for greater than $100 per day of travel must have a justification letter attached request. • Will not be issued more than 2 weeks prior to the traveler’s departure date. • Exception – Transportation expenses can be distributed up to 90 days in advance of departure date. A component of the Business/Accounting Certificate Program

14. Travel Advances (cont’d) • Settled by submitting a Travel And Business Expense Report (TABER) with appropriate receipts within 60 days of the traveler’s return to work. • Must be settled before subsequent advances are issued. • Send requests to Division of University Accounting, Room 300, Administrative Services Building, Busch Campus, attn: Lisa Robinson. Questions (x5-3354). A component of the Business/Accounting Certificate Program

15. Expense Report Requirements • Detail of the business reason or purpose for the expenditure, Clear explanations. • Itemization and all original receipts for every expense over $50,( except meals.) • Original signature of the individual traveler requesting reimbursement, and • Approval of the TABER by the traveler’s supervisor or the supervisor’s designee who does not report to the traveler. • Traveler must submit the expense report within 60 days. • TABERs submitted beyond one year after the date(s) of travel will not be reimbursed A component of the Business/Accounting Certificate Program

16. Reimbursable Travel Expenses • Commercial Air • University will reimburse only for coach class tickets aboard a regularly scheduled commercial carrier. • For reimbursement of airline ticket purchases, proof of payment for the airline ticket. Boarding passes when possible are to be submitted with the TABER. • Commercial Bus/Rail Fares • Reimbursement will be the reasonable actual cost. The ticket stub or a detailed receipt must show the fare. A component of the Business/Accounting Certificate Program.

17. Reimbursable Travel Expenses (cont’d) • Lodging Reservations • The trip must be more than 100 miles one-way. Exceptions must be approved, explained and included in the reimbursement request and attached to the TABER. • The original receipted hotel bill must substantiate the expenses and must specify rate, date(s) of stay • Proof of Hotel payment must be attached to TABER. A component of the business/Accounting Certificate Program.

18. Reimbursable Travel Expenses (cont’d) • Car Rental • Must be a business justification or when there is no other means of transportation. • Reimbursement only to the traveler who signed the rental agreement • Original receipts for car rentals and the rental contract must be attached to the TABER. • Ground Transportation • Includes from the traveler’s home, or from their work site to the airport, bus, or train station @57.5 cents per mile. • Receipts must show amount and the date of service. A Component of the Business/Accounting/Certificate Program.

19. Reimbursable Travel Expenses (cont’d) • Employee Meal Expenses (3 options) • Option 1) Reimbursement for actual expenses up to $60 per day. • Submit itemized original receipts with proof of payment. • Do not seek reimbursement for a meal that is included in travel, such as at a conference. Conference agenda is required to substantiate meals provided at conference. • Individual meal expense must be a reasonable portion of the $60/day option. A component of the Business/Accounting Certificate Program.

20. Reimbursable Travel Expenses (cont’d) Employee Meal Expenses: Option 2) Meal allowance – no receipts: $30 per day reimbursement or $50 per day from major city chart on travel web site • Must be prorated for any day meals are provided at a conference. • This option must be used for entire trip. • Prorated daily allowance for departure and arrival times on travel dates A component of the Business/Accounting Certificate Program.

21. Reimbursable Travel Expenses (cont’d) Employee Meal Expenses: Option 3) IRS federal per diem rate from travel web site • This option must be used for entire trip. • Must be prorated for any day meals are provided at a conference. • Prorated daily allowance for departure and arrival times on travel dates A component of the Business/Accounting Certificate Program.

22. Reimbursable Travel Expenses (cont’d) • Employee Meal Expenses: • % of meal per diem rate when a meal is provided at conference: breakfast 20% lunch 20% dinner 60% A component of the Business/Accounting Certificate Program.

23. Reimbursable Travel Expenses (cont’d) • Employee Meal Expenses: • % of meal per diem for departure date • 12:01 am to 7:00am 100% • 7:01am to 1:00pm 80% • 1:01pm to 7:00pm 60% • 7:01pm to 12:pm 0% A component of the Business/Accounting Certificate Program.

24. Reimbursable Travel Expenses (cont’d) • Employee Meal Expenses: • % of meal per diem for arrival or return date • 12:01 am to 7:00am 0% • 7:01am to 1:00pm 20% • 1:01pm to 7:00pm 40% • 7:01pm to 12:pm 100% A component of the Business/Accounting Certificate Program.

25. Business Expenses • Business Meals for Meetings • Receipts must be original, itemized and include the provider’s name and date, the name(s) of any other person included on the bill, and purpose of the meeting. • Receipt must indicate that bill was paid. Credit card receipts alone are not acceptable. • To determine if business meal expense is appropriate, consult with your supervisor who should use professional judgment in determining whether: • Topic of discussion (meeting) warrants use of University funds for meal expense. • Benefit derived from incurring expense is most effective, efficient and productive way to use university resources. • Fund are available. A component of the Business/Accounting Certificate Program.

26. Business Expenses • UNDER $500 small goods and services for emergency purposes • All violations must be sent to purchasing dept for one time approval if appropriate • Use purchasing dept for goods and services over $500

27. Examples of Noncompliance • Missing the reason or business purpose for the reimbursement. • Approving of TABER by subordinates. • Failing to provide receipts for all expenses • Expenses that are not Rutgers business-related. • Charging alcohol on state and grant accounts. • Meals included in the cost of conference/meeting fees • Charging a higher per mileage rate for use of personal car than allowed by the University. (Currently, the mileage rate is 57.5 cents per m) • Seeking reimbursement for mileage and gas expense concurrently. • Seeking reimbursement for a spouse or family member’s travel costs A component of the Business/Accounting certificate program.

28. Subcode Review • Commonly Used: • 3490 Travel Advances • 3500 Travel/Meals • 3510 Travel-Recruitment • 3520 Travel-Domestic-DGCA • 3530 Travel-Foreign-DGCA • 3540 Travel-Consult-DGCA • 3550 Employee Moving Exp • 3560 Training • 3590 Registration/Conf. Fees For a full listing of expense type sub codes see the SC screen on OFIS. A component of the Business/Accounting Certificate Program

29. Expense Report References • Regulations and Procedural Manual • 40.4.1 Travel, Travel Incidentals and Meal Expense Policy • 60.1.6 Policies and Procedures Concerning Employee Relocation • Travel Website www.rutravel.rutgers.edu See Responsibilities. • Call Dept. Business manager • Tax Dept-Terri Shields, Taber compliance 445-2798 A component of the Business/Accounting Certificate Program

30. Questions/Comments/ Thoughts from Audience???