FPC Chapter 3.1

All of the following benefits are taxable wages EXCEPT: A. de minimis fringe benefits. B. overtime compensation. C. commissions. D. bonuses.

A. de minimis fringe benefits.

All of the following items are taxable compensation EXCEPT: A. educational reimbursement for job-related courses. B. season tickets to the theater. C. an employer provided gift certificate. D. group legal services.

A. educational reimbursement for job-related courses. ***Taxable Compensation*** - Back-pay awards - Bonuses - Commissions - Company vehicles (personal use) - Dismissal and severance pay or final vacation pay - Employer-paid commuter fees in excess of $255/month - Employer-paid parking greater than $255/month - Employer-provided bicycle commuting assistance in excess of $20/month - Fringe benefits (unless specifically excluded) - Gifts, gift certificates, prizes, and awards - Group legal services - Group-term life insurance over $50,000 - Nonaccountable reimbursed business expenses - Noncash fringes, unless excluded by Internal Revenue Code - Nonqualified moving expenses - Overtime pay - Regular wages - Sick pay and disability benefits (portion attributable to employer contributions) - Tips-

All of the following benefits are taxable EXCEPT: A. the cost of moving household goods paid by the company due to a qualified relocation. B. reimbursements for meal expenses incurred during relocation. C. company-paid premiums for $10,000.00 in dependent group-term life insurance. D. the personal use of a company car.

A. the cost of moving household goods paid by the company due to a qualified relocation.

What wages and benefits received by an employee are subject to federal taxes and reporting? A. Only the wages and benefits listed as taxable in IRS publications B. All wages and benefits unless the Internal Code provides an exception C. Only the cash wages paid to the employee are taxable D. All wages and benefits are taxable in all circumstances

B. All wages and benefits unless the Internal Code provides an exception ***This means that the wages and benefits that employees receive are generally included in income and are subject to income and employment tax withholding, payment, and reporting requirements unless the IRC says otherwise.***

All of the following benefits are taxable fringe benefits EXCEPT: A. personal use of company vehicle. B. qualified employee discounts. C. company-provided group-term life insurance in excess of $50,000.00. D. prize in company-sponsored sales contest.

B. qualified employee discounts. ***Taxable Compensation*** - Back-pay awards - Bonuses - Commissions - Company vehicles (personal use) - Dismissal and severance pay or final vacation pay - Employer-paid commuter fees in excess of $255/month - Employer-paid parking greater than $255/month - Employer-provided bicycle commuting assistance in excess of $20/month - Fringe benefits (unless specifically excluded) - Gifts, gift certificates, prizes, and awards - Group legal services - Group-term life insurance over $50,000 - Nonaccountable reimbursed business expenses - Noncash fringes, unless excluded by Internal Revenue Code - Nonqualified moving expenses - Overtime pay - Regular wages - Sick pay and disability benefits (portion attributable to employer contributions) - Tips-

Which of the following types of compensation is taxable income? A. Qualified transportation fringe benefits B. No-additional-cost fringe benefits C. Commissions D. Qualified moving expenses

C. Commissions

Which of the following employer-provided benefits is taxable? A. No-additional-cost services B. Cost of a job-related seminar C. Company-provided group-term life insurance in excess of $50,000.00 D. Cost of a company holiday party

C. Company-provided group-term life insurance in excess of $50,000.00 ***Taxable Compensation*** - Back-pay awards - Bonuses - Commissions - Company vehicles (personal use) - Dismissal and severance pay or final vacation pay - Employer-paid commuter fees in excess of $255/month - Employer-paid parking greater than $255/month - Employer-provided bicycle commuting assistance in excess of $20/month - Fringe benefits (unless specifically excluded) - Gifts, gift certificates, prizes, and awards - Group legal services - Group-term life insurance over $50,000 - Nonaccountable reimbursed business expenses - Noncash fringes, unless excluded by Internal Revenue Code - Nonqualified moving expenses - Overtime pay - Regular wages - Sick pay and disability benefits (portion attributable to employer contributions) - Tips-

All of the following benefits are taxable EXCEPT: A. an incentive sales award. B. the personal use of a company car. C. on-premises athletic facilities. D. company-paid premiums for $10,000.00 in dependent group-term life insurance.

C. on-premises athletic facilities.

How does the IRS define gross income? A. Any fringe benefit the employee receives B. All payments received by the employee C. All cash received by the employee D. All compensation for services performed

D. All compensation for services performed

Which of the following types of compensation is taxable income? A. Job-related educational assistance B. Qualified transportation fringe benefits C. No-additional-cost services D. Personal use of a company vehicle

D. Personal use of a company vehicle

Noncash fringe benefits included in gross income are valued at the: A. employer's cost. B. employee's perception of the value. C. cost on January 1. D. fair market value.

D. fair market value.