[Individual]Fringe Benefits -- General(Feb-13-2011, 65 days left)

What's the Fringe Benefits?

It is received in connection with the performance of your services. In general, it is included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law.

You must realize the accounting period used by your employer:

2 options available for your employer to report taxable noncash fringe benefits:

1. full calendar year (Jan-1 to Dec-31)

2. treat the last 2 months of the calendar year (or any shorter period) as a part of the following calendar year (e.g. Nov-1 2011 to Oct-31 2012)

Employer can use different accounting period for each fringe benefits, but must use the same period for each particular benefits.

Employee must use the same accounting method as employer used

PSQ

Source: http://www.irs.gov

[Individual]Social security and Medicare taxes paid by employer & Stock appreciation rights (Feb-12-2011, 66 days left)

• Social security and Medicare taxes paid by employer:

If your employer agree to pay your part of Social Security and Medicare taxes, you must report this part as your income. And you must include this part of income when you calculate your social security and Medicare taxes and benefits, except that you are household worker or a farm worker.

• Stock appreciation rights:

Do not include stock appreciation until you exercise the right. The income equal to the difference between the fair market value of the stock on the date of exercise and the fair market value on the date the right k granted.

PSQ

Source: http://www.irs.gov

[Individual]Sick pay (Feb-11-2011, 67 days left)

You must include the payment from your employee when you are sick or injured.

Where do you get the payment?

1. if you get payment from a 3rd party who is not your employer, you may choose to withhold your tax or not. Then you must fill out Form W-4S.

2. if you receive the payment under a collective bargaining agreement between your union and your employer, the withholding part depends on the provisions in the agreement.

The sources of sick pay benefits:

• A welfare fund

• A state sickness or disability fund
• An association of employers or employees.
• An insurance plan via accident or health plan

Employer pay the premium	Employee pay the premium	Both pay the premium
The benefits are taxable	The benefits are nontaxable	The benefits are taxable only the amount due to employer's payments

If the accident or health insurance plan is under cafeteria plan

If you include the premiums as you income	If you don't include the premiums as your income
The benefits are nontaxable	The benefits are taxable

PSQ

Source: http://www.irs.gov

[Individual]Severance pay (Feb-10-2011, 68 days left)

You must include the following in income:

• Severance pay

--Outplacement services: No matter you severance is reduced by outplacement services fee or not, you must include the unreduced amount as your income.

• Any payment for the cancellation of your employment contract

--Accrued leave payment: you are a federal employee and receive a lump-sum payment for accrued annual leave when you retire or resign.

You may make adjustment for gross income :

• Repayment for your Accrued leave payment, because reemployed by another agency. You can reduce this part from your gross income.

You can deduct as miscellaneous deduction (subject to the 2% of AGI limit on schedule A):

• The value of the outplacement services up to the difference between the severance pay included in income and the amount actually received)

PSQ

Source: http://www.irs.gov

[Individual]Note received for services (Feb-9-2011, 69 days left)

When your employer gives you a secured note:

You must include the fair market value of the note in your income.

When your employer gives you a nonnegotiable unsecured note:

The principal amount of the note are compensation income when you receive them.

When you receive the periodic payment or lump-sum payment following:

You don't include the recovery part of the fair market value as your income, and only include the remaining part, like interest.

PSQ

Source: http://www.irs.gov

[Individual]Prizes, Bonuses and Awards (Feb-8-2011, 70 days left)

Generally, when you receive prizes or awards from employer for outstanding work, you should include the fair market value of prizes or awards into your income, except you get them from charity or non-profit organization. There are some rules for specific awards:

Back pay awards:

These include payments made to you for damages, unpaid life insurance premiums, and unpaid health insurance premiums, and unpaid health insurance premiums.

Employee achievement award:

If you receive tangible personal property (other than cash, a gift certificate, or an equivalent item) as an award for length of service or safety achievement, you generally can exclude its value from your income. The amount is limited to the lesser of:

• Employer's cost
• 1600, or 400, if awards are not qualified plan awards

But the exclusions does not apply to the following awards:

• A length-of-service award if you received it for less than 5 years of service or if you received another length-of-service award during the year or the previous 4 years.
• A safety achievement award if you are a manager, administrator, clerical employee, or other professional employee or if more than 10% of eligible employees previously received safety achievement awards during the year.

PSQ

Source: http://www.irs.gov

MY working list --Tax Credits (Feb-7-2011, 71 days left)

• Foreign tax credit, except any credit that applies to wages not subject to U.S. income tax withholding because they are subject to income tax withholding by a foreign country.
• Child and Dependent Care Credit
• Credit for the elderly or the disabled
• Child Tax Credit & Additional Child Tax Credit

• Education credits

• Earned income credit, unless you requested advance payment of the credit

• Retirement savings contributions credit

• Mortgage interest credit

• Adoption credit

• Credit for prior year minimum tax (both refundable and nonrefundable) if you paid alternative minimum tax in an earlier year.

• General business credit.

• Alternative motor vehicle credit (including the plug-in conversion credit)

• Alternative fuel vehicle refueling property credit

• Plug-in electric motor vehicle credit

• Credit to holders of tax credit bonds

• Health coverage tax credit

• Residential energy credits

• Making work pay credits

• Carryforward from prior years of a qualified electric vehicle passive activity credit

• Credit for tax on undistributed capital gain

• First-time homebuyer credit

• Credit for excess social security tax or railroad retirement tax withheld

PSQ

Source: http://www.irs.gov