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Filing Taxes For Military

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Filing Taxes For Military

Filing taxes for military Publication 15-B - Main Content Table of Contents 1. Filing taxes for military Fringe Benefit OverviewAre Fringe Benefits Taxable? Cafeteria Plans Simple Cafeteria Plans 2. Filing taxes for military Fringe Benefit Exclusion RulesAccident and Health Benefits Achievement Awards Adoption Assistance Athletic Facilities De Minimis (Minimal) Benefits Dependent Care Assistance Educational Assistance Employee Discounts Employee Stock Options Employer-Provided Cell Phones Group-Term Life Insurance Coverage Health Savings Accounts Lodging on Your Business Premises Meals Moving Expense Reimbursements No-Additional-Cost Services Retirement Planning Services Transportation (Commuting) Benefits Tuition Reduction Working Condition Benefits 3. Filing taxes for military Fringe Benefit Valuation RulesGeneral Valuation Rule Cents-Per-Mile Rule Commuting Rule Lease Value Rule Unsafe Conditions Commuting Rule 4. Filing taxes for military Rules for Withholding, Depositing, and ReportingTransfer of property. Filing taxes for military Amount of deposit. Filing taxes for military Limitation. Filing taxes for military Conformity rules. Filing taxes for military Election not to withhold income tax. Filing taxes for military How To Get Tax Help 1. Filing taxes for military Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. Filing taxes for military For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. Filing taxes for military Performance of services. Filing taxes for military   A person who performs services for you does not have to be your employee. Filing taxes for military A person may perform services for you as an independent contractor, partner, or director. Filing taxes for military Also, for fringe benefit purposes, treat a person who agrees not to perform services (such as under a covenant not to compete) as performing services. Filing taxes for military Provider of benefit. Filing taxes for military   You are the provider of a fringe benefit if it is provided for services performed for you. Filing taxes for military You are considered the provider of a fringe benefit even if a third party, such as your client or customer, provides the benefit to your employee for services the employee performs for you. Filing taxes for military For example, if, in exchange for goods or services, your customer provides day care services as a fringe benefit to your employees for services they provide for you as their employer, then you are the provider of this fringe benefit even though the customer is actually providing the day care. Filing taxes for military Recipient of benefit. Filing taxes for military   The person who performs services for you is considered the recipient of a fringe benefit provided for those services. Filing taxes for military That person may be considered the recipient even if the benefit is provided to someone who did not perform services for you. Filing taxes for military For example, your employee may be the recipient of a fringe benefit you provide to a member of the employee's family. Filing taxes for military Are Fringe Benefits Taxable? Any fringe benefit you provide is taxable and must be included in the recipient's pay unless the law specifically excludes it. Filing taxes for military Section 2 discusses the exclusions that apply to certain fringe benefits. Filing taxes for military Any benefit not excluded under the rules discussed in section 2 is taxable. Filing taxes for military Including taxable benefits in pay. Filing taxes for military   You must include in a recipient's pay the amount by which the value of a fringe benefit is more than the sum of the following amounts. Filing taxes for military Any amount the law excludes from pay. Filing taxes for military Any amount the recipient paid for the benefit. Filing taxes for military The rules used to determine the value of a fringe benefit are discussed in section 3. Filing taxes for military   If the recipient of a taxable fringe benefit is your employee, the benefit is subject to employment taxes and must be reported on Form W-2, Wage and Tax Statement. Filing taxes for military However, you can use special rules to withhold, deposit, and report the employment taxes. Filing taxes for military These rules are discussed in section 4. Filing taxes for military   If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes. Filing taxes for military However, you may have to report the benefit on one of the following information returns. Filing taxes for military If the recipient receives the benefit as: Use: An independent contractor Form 1099-MISC, Miscellaneous Income A partner Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Filing taxes for military For more information, see the instructions for the forms listed above. Filing taxes for military Cafeteria Plans A cafeteria plan, including a flexible spending arrangement, is a written plan that allows your employees to choose between receiving cash or taxable benefits instead of certain qualified benefits for which the law provides an exclusion from wages. Filing taxes for military If an employee chooses to receive a qualified benefit under the plan, the fact that the employee could have received cash or a taxable benefit instead will not make the qualified benefit taxable. Filing taxes for military Generally, a cafeteria plan does not include any plan that offers a benefit that defers pay. Filing taxes for military However, a cafeteria plan can include a qualified 401(k) plan as a benefit. Filing taxes for military Also, certain life insurance plans maintained by educational institutions can be offered as a benefit even though they defer pay. Filing taxes for military Qualified benefits. Filing taxes for military   A cafeteria plan can include the following benefits discussed in section 2. Filing taxes for military Accident and health benefits (but not Archer medical savings accounts (Archer MSAs) or long-term care insurance). Filing taxes for military Adoption assistance. Filing taxes for military Dependent care assistance. Filing taxes for military Group-term life insurance coverage (including costs that cannot be excluded from wages). Filing taxes for military Health savings accounts (HSAs). Filing taxes for military Distributions from an HSA may be used to pay eligible long-term care insurance premiums or qualified long-term care services. Filing taxes for military Benefits not allowed. Filing taxes for military   A cafeteria plan cannot include the following benefits discussed in section 2. Filing taxes for military Archer MSAs. Filing taxes for military See Accident and Health Benefits in section 2. Filing taxes for military Athletic facilities. Filing taxes for military De minimis (minimal) benefits. Filing taxes for military Educational assistance. Filing taxes for military Employee discounts. Filing taxes for military Employer-provided cell phones. Filing taxes for military Lodging on your business premises. Filing taxes for military Meals. Filing taxes for military Moving expense reimbursements. Filing taxes for military No-additional-cost services. Filing taxes for military Transportation (commuting) benefits. Filing taxes for military Tuition reduction. Filing taxes for military Working condition benefits. Filing taxes for military It also cannot include scholarships or fellowships (discussed in Publication 970, Tax Benefits for Education). Filing taxes for military $2,500 limit on a health flexible spending arrangement (FSA). Filing taxes for military   For plan years beginning after December 31, 2012, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,500. Filing taxes for military For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. Filing taxes for military   A cafeteria plan offering a health FSA must be amended to specify the $2,500 limit (or any lower limit set by the employer). Filing taxes for military While cafeteria plans generally must be amended on a prospective basis, an amendment that is adopted on or before December 31, 2014, may be made effective retroactively, provided that in operation the cafeteria plan meets the limit for plan years beginning after December 31, 2012. Filing taxes for military A cafeteria plan that does not limit health FSA contributions to the dollar limit is not a cafeteria plan and all benefits offered under the plan are includible in the employee's gross income. Filing taxes for military   For more information, see Notice 2012-40, 2012-26 I. Filing taxes for military R. Filing taxes for military B. Filing taxes for military 1046, available at www. Filing taxes for military irs. Filing taxes for military gov/irb/2012-26_IRB/ar09. Filing taxes for military html. Filing taxes for military Employee. Filing taxes for military   For these plans, treat the following individuals as employees. Filing taxes for military A current common-law employee. Filing taxes for military See section 2 in Publication 15 (Circular E) for more information. Filing taxes for military A full-time life insurance agent who is a current statutory employee. Filing taxes for military A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Filing taxes for military Exception for S corporation shareholders. Filing taxes for military   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Filing taxes for military A 2% shareholder for this purpose is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Filing taxes for military Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Filing taxes for military Plans that favor highly compensated employees. Filing taxes for military   If your plan favors highly compensated employees as to eligibility to participate, contributions, or benefits, you must include in their wages the value of taxable benefits they could have selected. Filing taxes for military A plan you maintain under a collective bargaining agreement does not favor highly compensated employees. Filing taxes for military   A highly compensated employee for this purpose is any of the following employees. Filing taxes for military An officer. Filing taxes for military A shareholder who owns more than 5% of the voting power or value of all classes of the employer's stock. Filing taxes for military An employee who is highly compensated based on the facts and circumstances. Filing taxes for military A spouse or dependent of a person described in (1), (2), or (3). Filing taxes for military Plans that favor key employees. Filing taxes for military   If your plan favors key employees, you must include in their wages the value of taxable benefits they could have selected. Filing taxes for military A plan favors key employees if more than 25% of the total of the nontaxable benefits you provide for all employees under the plan go to key employees. Filing taxes for military However, a plan you maintain under a collective bargaining agreement does not favor key employees. Filing taxes for military   A key employee during 2014 is generally an employee who is either of the following. Filing taxes for military An officer having annual pay of more than $170,000. Filing taxes for military An employee who for 2014 is either of the following. Filing taxes for military A 5% owner of your business. Filing taxes for military A 1% owner of your business whose annual pay was more than $150,000. Filing taxes for military Simple Cafeteria Plans Eligible employers meeting contribution requirements and eligibility and participation requirements can establish a simple cafeteria plan. Filing taxes for military Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan. Filing taxes for military Eligible employer. Filing taxes for military   You are an eligible employer if you employ an average of 100 or fewer employees during either of the 2 preceding years. Filing taxes for military If your business was not in existence throughout the preceding year, you are eligible if you reasonably expect to employ an average of 100 or fewer employees in the current year. Filing taxes for military If you establish a simple cafeteria plan in a year that you employ an average of 100 or fewer employees, you are considered an eligible employer for any subsequent year as long as you do not employ an average of 200 or more employees in a subsequent year. Filing taxes for military Eligibility and participation requirements. Filing taxes for military   These requirements are met if all employees who had at least 1,000 hours of service for the preceding plan year are eligible to participate and each employee eligible to participate in the plan may elect any benefit available under the plan. Filing taxes for military You may elect to exclude from the plan employees who: Are under age 21 before the close of the plan year, Have less than 1 year of service with you as of any day during the plan year, Are covered under a collective bargaining agreement, or Are nonresident aliens working outside the United States whose income did not come from a U. Filing taxes for military S. Filing taxes for military source. Filing taxes for military Contribution requirements. Filing taxes for military   You must make a contribution to provide qualified benefits on behalf of each qualified employee in an amount equal to: A uniform percentage (not less than 2%) of the employee’s compensation for the plan year, or An amount which is at least 6% of the employee’s compensation for the plan year or twice the amount of the salary reduction contributions of each qualified employee, whichever is less. Filing taxes for military If the contribution requirements are met using option (2), the rate of contribution to any salary reduction contribution of a highly compensated or key employee can not be greater than the rate of contribution to any other employee. Filing taxes for military More information. Filing taxes for military   For more information about cafeteria plans, see section 125 of the Internal Revenue Code and its regulations. Filing taxes for military 2. Filing taxes for military Fringe Benefit Exclusion Rules This section discusses the exclusion rules that apply to fringe benefits. Filing taxes for military These rules exclude all or part of the value of certain benefits from the recipient's pay. Filing taxes for military The excluded benefits are not subject to federal income tax withholding. Filing taxes for military Also, in most cases, they are not subject to social security, Medicare, or federal unemployment (FUTA) tax and are not reported on Form W-2. Filing taxes for military This section discusses the exclusion rules for the following fringe benefits. Filing taxes for military Accident and health benefits. Filing taxes for military Achievement awards. Filing taxes for military Adoption assistance. Filing taxes for military Athletic facilities. Filing taxes for military De minimis (minimal) benefits. Filing taxes for military Dependent care assistance. Filing taxes for military Educational assistance. Filing taxes for military Employee discounts. Filing taxes for military Employee stock options. Filing taxes for military Employer-provided cell phones. Filing taxes for military Group-term life insurance coverage. Filing taxes for military Health savings accounts (HSAs). Filing taxes for military Lodging on your business premises. Filing taxes for military Meals. Filing taxes for military Moving expense reimbursements. Filing taxes for military No-additional-cost services. Filing taxes for military Retirement planning services. Filing taxes for military Transportation (commuting) benefits. Filing taxes for military Tuition reduction. Filing taxes for military Working condition benefits. Filing taxes for military See Table 2-1, later, for an overview of the employment tax treatment of these benefits. Filing taxes for military Table 2-1. Filing taxes for military Special Rules for Various Types of Fringe Benefits (For more information, see the full discussion in this section. Filing taxes for military ) Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare (including Additional Medicare Tax when wages are paid in excess of $200,000) Federal Unemployment (FUTA) Accident and health benefits Exempt1,2, except for long-term care benefits provided through a flexible spending or similar arrangement. Filing taxes for military Exempt, except for certain payments to S corporation employees who are 2% shareholders. Filing taxes for military Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). Filing taxes for military Adoption assistance Exempt1,3 Taxable Taxable Athletic facilities Exempt if substantially all use during the calendar year is by employees, their spouses, and their dependent children and the facility is operated by the employer on premises owned or leased by the employer. Filing taxes for military De minimis (minimal) benefits Exempt Exempt Exempt Dependent care assistance Exempt3 up to certain limits, $5,000 ($2,500 for married employee filing separate return). Filing taxes for military Educational assistance Exempt up to $5,250 of benefits each year. Filing taxes for military (See Educational Assistance , later in this section. Filing taxes for military ) Employee discounts Exempt3 up to certain limits. Filing taxes for military (See Employee Discounts , later in this section. Filing taxes for military ) Employee stock options See Employee Stock Options , later in this section. Filing taxes for military Employer-provided cell phones Exempt if provided primarily for noncompensatory business purposes. Filing taxes for military Group-term life insurance coverage Exempt Exempt1,4, 7 up to cost of $50,000 of coverage. Filing taxes for military (Special rules apply to former employees. Filing taxes for military ) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. Filing taxes for military (See Health Savings Accounts , later in this section. Filing taxes for military ) Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. Filing taxes for military Meals Exempt if furnished on your business premises for your convenience. Filing taxes for military Exempt if de minimis. Filing taxes for military Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them. Filing taxes for military No-additional-cost services Exempt3 Exempt3 Exempt3 Retirement planning services Exempt5 Exempt5 Exempt5 Transportation (commuting) benefits Exempt1 up to certain limits if for rides in a commuter highway vehicle and/or transit passes ($130), qualified parking ($250), or qualified bicycle commuting reimbursement6 ($20). Filing taxes for military (See Transportation (Commuting) Benefits , later in this section. Filing taxes for military ) Exempt if de minimis. Filing taxes for military Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). Filing taxes for military Working condition benefits Exempt Exempt Exempt 1 Exemption does not apply to S corporation employees who are 2% shareholders. Filing taxes for military 2 Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees. Filing taxes for military 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. Filing taxes for military 4 Exemption does not apply to certain key employees under a plan that favors those employees. Filing taxes for military 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. Filing taxes for military 6 If the employee receives a qualified bicycle commuting reimbursement in a qualified bicycle commuting month, the employee cannot receive commuter highway vehicle, transit pass, or qualified parking benefits in that same month. Filing taxes for military 7 You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. Filing taxes for military Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Filing taxes for military Also, show it in box 12 with code “C. Filing taxes for military ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Filing taxes for military Accident and Health Benefits This exclusion applies to contributions you make to an accident or health plan for an employee, including the following. Filing taxes for military Contributions to the cost of accident or health insurance including qualified long-term care insurance. Filing taxes for military Contributions to a separate trust or fund that directly or through insurance provides accident or health benefits. Filing taxes for military Contributions to Archer MSAs or health savings accounts (discussed in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans). Filing taxes for military This exclusion also applies to payments you directly or indirectly make to an employee under an accident or health plan for employees that are either of the following. Filing taxes for military Payments or reimbursements of medical expenses. Filing taxes for military Payments for specific injuries or illnesses (such as the loss of the use of an arm or leg). Filing taxes for military The payments must be figured without regard to any period of absence from work. Filing taxes for military Accident or health plan. Filing taxes for military   This is an arrangement that provides benefits for your employees, their spouses, their dependents, and their children (under age 27) in the event of personal injury or sickness. Filing taxes for military The plan may be insured or noninsured and does not need to be in writing. Filing taxes for military Employee. Filing taxes for military   For this exclusion, treat the following individuals as employees. Filing taxes for military A current common-law employee. Filing taxes for military A full-time life insurance agent who is a current statutory employee. Filing taxes for military A retired employee. Filing taxes for military A former employee you maintain coverage for based on the employment relationship. Filing taxes for military A widow or widower of an individual who died while an employee. Filing taxes for military A widow or widower of a retired employee. Filing taxes for military For the exclusion of contributions to an accident or health plan, a leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Filing taxes for military Special rule for certain government plans. Filing taxes for military   For certain government accident and health plans, payments to a deceased plan participant's beneficiary may qualify for the exclusion from gross income if the other requirements for exclusion are met. Filing taxes for military See section 105(j) for details. Filing taxes for military Exception for S corporation shareholders. Filing taxes for military   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Filing taxes for military A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Filing taxes for military Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Filing taxes for military Exclusion from wages. Filing taxes for military   You can generally exclude the value of accident or health benefits you provide to an employee from the employee's wages. Filing taxes for military Exception for certain long-term care benefits. Filing taxes for military   You cannot exclude contributions to the cost of long-term care insurance from an employee's wages subject to federal income tax withholding if the coverage is provided through a flexible spending or similar arrangement. Filing taxes for military This is a benefit program that reimburses specified expenses up to a maximum amount that is reasonably available to the employee and is less than five times the total cost of the insurance. Filing taxes for military However, you can exclude these contributions from the employee's wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Filing taxes for military S corporation shareholders. Filing taxes for military   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the value of accident or health benefits you provide to the employee in the employee's wages subject to federal income tax withholding. Filing taxes for military However, you can exclude the value of these benefits (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. Filing taxes for military Exception for highly compensated employees. Filing taxes for military   If your plan is a self-insured medical reimbursement plan that favors highly compensated employees, you must include all or part of the amounts you pay to these employees in their wages subject to federal income tax withholding. Filing taxes for military However, you can exclude these amounts (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. Filing taxes for military   A self-insured plan is a plan that reimburses your employees for medical expenses not covered by an accident or health insurance policy. Filing taxes for military   A highly compensated employee for this exception is any of the following individuals. Filing taxes for military One of the five highest paid officers. Filing taxes for military An employee who owns (directly or indirectly) more than 10% in value of the employer's stock. Filing taxes for military An employee who is among the highest paid 25% of all employees (other than those who can be excluded from the plan). Filing taxes for military   For more information on this exception, see section 105(h) of the Internal Revenue Code and its regulations. Filing taxes for military COBRA premiums. Filing taxes for military   The exclusion for accident and health benefits applies to amounts you pay to maintain medical coverage for a current or former employee under the Combined Omnibus Budget Reconciliation Act of 1986 (COBRA). Filing taxes for military The exclusion applies regardless of the length of employment, whether you directly pay the premiums or reimburse the former employee for premiums paid, and whether the employee's separation is permanent or temporary. Filing taxes for military Achievement Awards This exclusion applies to the value of any tangible personal property you give to an employee as an award for either length of service or safety achievement. Filing taxes for military The exclusion does not apply to awards of cash, cash equivalents, gift certificates, or other intangible property such as vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, and other securities. Filing taxes for military The award must meet the requirements for employee achievement awards discussed in chapter 2 of Publication 535, Business Expenses. Filing taxes for military Employee. Filing taxes for military   For this exclusion, treat the following individuals as employees. Filing taxes for military A current employee. Filing taxes for military A former common-law employee you maintain coverage for in consideration of or based on an agreement relating to prior service as an employee. Filing taxes for military A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Filing taxes for military Exception for S corporation shareholders. Filing taxes for military   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Filing taxes for military A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Filing taxes for military Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Filing taxes for military Exclusion from wages. Filing taxes for military   You can generally exclude the value of achievement awards you give to an employee from the employee's wages if their cost is not more than the amount you can deduct as a business expense for the year. Filing taxes for military The excludable annual amount is $1,600 ($400 for awards that are not “qualified plan awards”). Filing taxes for military See chapter 2 of Publication 535 for more information about the limit on deductions for employee achievement awards. Filing taxes for military    To determine for 2014 whether an achievement award is a “qualified plan award” under the deduction rules described in Publication 535, treat any employee who received more than $115,000 in pay for 2013 as a highly compensated employee. Filing taxes for military   If the cost of awards given to an employee is more than your allowable deduction, include in the employee's wages the larger of the following amounts. Filing taxes for military The part of the cost that is more than your allowable deduction (up to the value of the awards). Filing taxes for military The amount by which the value of the awards exceeds your allowable deduction. Filing taxes for military Exclude the remaining value of the awards from the employee's wages. Filing taxes for military Adoption Assistance An adoption assistance program is a separate written plan of an employer that meets all of the following requirements. Filing taxes for military It benefits employees who qualify under rules set up by you, which do not favor highly compensated employees or their dependents. Filing taxes for military To determine whether your plan meets this test, do not consider employees excluded from your plan who are covered by a collective bargaining agreement, if there is evidence that adoption assistance was a subject of good-faith bargaining. Filing taxes for military It does not pay more than 5% of its payments during the year for shareholders or owners (or their spouses or dependents). Filing taxes for military A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. Filing taxes for military You give reasonable notice of the plan to eligible employees. Filing taxes for military Employees provide reasonable substantiation that payments or reimbursements are for qualifying expenses. Filing taxes for military For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Filing taxes for military The employee was a 5% owner at any time during the year or the preceding year. Filing taxes for military The employee received more than $115,000 in pay for the preceding year. Filing taxes for military You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Filing taxes for military You must exclude all payments or reimbursements you make under an adoption assistance program for an employee's qualified adoption expenses from the employee's wages subject to federal income tax withholding. Filing taxes for military However, you cannot exclude these payments from wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Filing taxes for military For more information, see the Instructions for Form 8839, Qualified Adoption Expenses. Filing taxes for military You must report all qualifying adoption expenses you paid or reimbursed under your adoption assistance program for each employee for the year in box 12 of the employee's Form W-2. Filing taxes for military Use code “T” to identify this amount. Filing taxes for military Exception for S corporation shareholders. Filing taxes for military   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Filing taxes for military A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Filing taxes for military Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, including using the benefit as a reduction in distributions to the 2% shareholder. Filing taxes for military Athletic Facilities You can exclude the value of an employee's use of an on-premises gym or other athletic facility you operate from an employee's wages if substantially all use of the facility during the calendar year is by your employees, their spouses, and their dependent children. Filing taxes for military For this purpose, an employee's dependent child is a child or stepchild who is the employee's dependent or who, if both parents are deceased, has not attained the age of 25. Filing taxes for military On-premises facility. Filing taxes for military   The athletic facility must be located on premises you own or lease. Filing taxes for military It does not have to be located on your business premises. Filing taxes for military However, the exclusion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. Filing taxes for military Employee. Filing taxes for military   For this exclusion, treat the following individuals as employees. Filing taxes for military A current employee. Filing taxes for military A former employee who retired or left on disability. Filing taxes for military A widow or widower of an individual who died while an employee. Filing taxes for military A widow or widower of a former employee who retired or left on disability. Filing taxes for military A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Filing taxes for military A partner who performs services for a partnership. Filing taxes for military De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. Filing taxes for military A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. Filing taxes for military Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare. Filing taxes for military Examples of de minimis benefits include the following. Filing taxes for military Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes. Filing taxes for military See Employer-Provided Cell Phones , later in this section, for details. Filing taxes for military Occasional personal use of a company copying machine if you sufficiently control its use so that at least 85% of its use is for business purposes. Filing taxes for military Holiday gifts, other than cash, with a low fair market value. Filing taxes for military Group-term life insurance payable on the death of an employee's spouse or dependent if the face amount is not more than $2,000. Filing taxes for military Meals. Filing taxes for military See Meals , later in this section, for details. Filing taxes for military Occasional parties or picnics for employees and their guests. Filing taxes for military Occasional tickets for theater or sporting events. Filing taxes for military Transportation fare. Filing taxes for military See Transportation (Commuting) Benefits , later in this section, for details. Filing taxes for military Employee. Filing taxes for military   For this exclusion, treat any recipient of a de minimis benefit as an employee. Filing taxes for military Dependent Care Assistance This exclusion applies to household and dependent care services you directly or indirectly pay for or provide to an employee under a dependent care assistance program that covers only your employees. Filing taxes for military The services must be for a qualifying person's care and must be provided to allow the employee to work. Filing taxes for military These requirements are basically the same as the tests the employee would have to meet to claim the dependent care credit if the employee paid for the services. Filing taxes for military For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. Filing taxes for military Employee. Filing taxes for military   For this exclusion, treat the following individuals as employees. Filing taxes for military A current employee. Filing taxes for military A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Filing taxes for military Yourself (if you are a sole proprietor). Filing taxes for military A partner who performs services for a partnership. Filing taxes for military Exclusion from wages. Filing taxes for military   You can exclude the value of benefits you provide to an employee under a dependent care assistance program from the employee's wages if you reasonably believe that the employee can exclude the benefits from gross income. Filing taxes for military   An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. Filing taxes for military This limit is reduced to $2,500 for married employees filing separate returns. Filing taxes for military   However, the exclusion cannot be more than the smaller of the earned income of either the employee or employee's spouse. Filing taxes for military Special rules apply to determine the earned income of a spouse who is either a student or not able to care for himself or herself. Filing taxes for military For more information on the earned income limit, see Publication 503. Filing taxes for military Exception for highly compensated employees. Filing taxes for military   You cannot exclude dependent care assistance from the wages of a highly compensated employee unless the benefits provided under the program do not favor highly compensated employees and the program meets the requirements described in section 129(d) of the Internal Revenue Code. Filing taxes for military   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Filing taxes for military The employee was a 5% owner at any time during the year or the preceding year. Filing taxes for military The employee received more than $115,000 in pay for the preceding year. Filing taxes for military You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Filing taxes for military Form W-2. Filing taxes for military   Report the value of all dependent care assistance you provide to an employee under a dependent care assistance program in box 10 of the employee's Form W-2. Filing taxes for military Include any amounts you cannot exclude from the employee's wages in boxes 1, 3, and 5. Filing taxes for military Report both the nontaxable portion of assistance (up to $5,000) and any assistance above the amount that is non-taxable to the employee. Filing taxes for military Example. Filing taxes for military   Company A provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. Filing taxes for military In addition, it provides occasional on-site dependent care to its employees at no cost. Filing taxes for military Emily, an employee of company A, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. Filing taxes for military In addition, Emily used the on-site dependent care several times. Filing taxes for military The fair market value of the on-site care was $700. Filing taxes for military Emily's Form W-2 should report $5,200 of dependent care assistance in box 10 ($4,500 flexible spending arrangement plus $700 on-site dependent care). Filing taxes for military Boxes 1, 3, and 5 should include $200 (the amount in excess of the nontaxable assistance), and applicable taxes should be withheld on that amount. Filing taxes for military Educational Assistance This exclusion applies to educational assistance you provide to employees under an educational assistance program. Filing taxes for military The exclusion also applies to graduate level courses. Filing taxes for military Educational assistance means amounts you pay or incur for your employees' education expenses. Filing taxes for military These expenses generally include the cost of books, equipment, fees, supplies, and tuition. Filing taxes for military However, 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. Filing taxes for military 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. Filing taxes for military Nor do they include the cost of lodging, meals, or transportation. Filing taxes for military Educational assistance program. Filing taxes for military   An educational assistance program is a separate written plan that provides educational assistance only to your employees. Filing taxes for military The program qualifies only if all of the following tests are met. Filing taxes for military The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees. Filing taxes for military To determine whether your program meets this test, do not consider employees excluded from your program who are covered by a collective bargaining agreement if there is evidence that educational assistance was a subject of good-faith bargaining. Filing taxes for military The program does not provide more than 5% of its benefits during the year for shareholders or owners. Filing taxes for military A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. Filing taxes for military The program does not allow employees to choose to receive cash or other benefits that must be included in gross income instead of educational assistance. Filing taxes for military You give reasonable notice of the program to eligible employees. Filing taxes for military Your program can cover former employees if their employment is the reason for the coverage. Filing taxes for military   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Filing taxes for military The employee was a 5% owner at any time during the year or the preceding year. Filing taxes for military The employee received more than $115,000 in pay for the preceding year. Filing taxes for military You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Filing taxes for military Employee. Filing taxes for military   For this exclusion, treat the following individuals as employees. Filing taxes for military A current employee. Filing taxes for military A former employee who retired, left on disability, or was laid off. Filing taxes for military A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Filing taxes for military Yourself (if you are a sole proprietor). Filing taxes for military A partner who performs services for a partnership. Filing taxes for military Exclusion from wages. Filing taxes for military   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. Filing taxes for military Assistance over $5,250. Filing taxes for military   If you do not have an educational assistance plan, or you provide an employee with assistance exceeding $5,250, you must include the value of these benefits as wages, unless the benefits are working condition benefits. Filing taxes for military Working condition benefits may be excluded from wages. Filing taxes for military Property or a service provided is a working condition benefit to the extent that if the employee paid for it, the amount paid would have been deductible as a business or depreciation expense. Filing taxes for military See Working Condition Benefits , later, in this section. Filing taxes for military Employee Discounts This exclusion applies to a price reduction you give an employee on property or services you offer to customers in the ordinary course of the line of business in which the employee performs substantial services. Filing taxes for military However, it does not apply to discounts on real property or discounts on personal property of a kind commonly held for investment (such as stocks or bonds). Filing taxes for military Employee. Filing taxes for military   For this exclusion, treat the following individuals as employees. Filing taxes for military A current employee. Filing taxes for military A former employee who retired or left on disability. Filing taxes for military A widow or widower of an individual who died while an employee. Filing taxes for military A widow or widower of an employee who retired or left on disability. Filing taxes for military A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Filing taxes for military A partner who performs services for a partnership. Filing taxes for military Exclusion from wages. Filing taxes for military   You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits. Filing taxes for military For a discount on services, 20% of the price you charge nonemployee customers for the service. Filing taxes for military For a discount on merchandise or other property, your gross profit percentage times the price you charge nonemployee customers for the property. Filing taxes for military   Determine your gross profit percentage in the line of business based on all property you offer to customers (including employee customers) and your experience during the tax year immediately before the tax year in which the discount is available. Filing taxes for military To figure your gross profit percentage, subtract the total cost of the property from the total sales price of the property and divide the result by the total sales price of the property. Filing taxes for military Exception for highly compensated employees. Filing taxes for military   You cannot exclude from the wages of a highly compensated employee any part of the value of a discount that is not available on the same terms to one of the following groups. Filing taxes for military All of your employees. Filing taxes for military A group of employees defined under a reasonable classification you set up that does not favor highly compensated employees. Filing taxes for military   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Filing taxes for military The employee was a 5% owner at any time during the year or the preceding year. Filing taxes for military The employee received more than $115,000 in pay for the preceding year. Filing taxes for military You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Filing taxes for military Employee Stock Options There are three kinds of stock options—incentive stock options, employee stock purchase plan options, and nonstatutory (nonqualified) stock options. Filing taxes for military Wages for social security, Medicare, and federal unemployment (FUTA) taxes do not include remuneration resulting from the exercise, after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or from any disposition of stock acquired by exercising such an option. Filing taxes for military The IRS will not apply these taxes to an exercise before October 23, 2004, of an incentive stock option or an employee stock purchase plan option or to a disposition of stock acquired by such exercise. Filing taxes for military Additionally, federal income tax withholding is not required on the income resulting from a disqualifying disposition of stock acquired by the exercise after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or on income equal to the discount portion of stock acquired by the exercise, after October 22, 2004, of an employee stock purchase plan option resulting from any disposition of the stock. Filing taxes for military The IRS will not apply federal income tax withholding upon the disposition of stock acquired by the exercise, before October 23, 2004, of an incentive stock option or an employee stock purchase plan option. Filing taxes for military However, the employer must report as income in box 1 of Form W-2, (a) the discount portion of stock acquired by the exercise of an employee stock purchase plan option upon disposition of the stock, and (b) the spread (between the exercise price and the fair market value of the stock at the time of exercise) upon a disqualifying disposition of stock acquired by the exercise of an incentive stock option or an employee stock purchase plan option. Filing taxes for military An employer must report the excess of the fair market value of stock received upon exercise of a nonstatutory stock option over the amount paid for the stock option on Form W-2 in boxes 1, 3 (up to the social security wage base), 5, and in box 12 using the code “V. Filing taxes for military ” See Regulations section 1. Filing taxes for military 83-7. Filing taxes for military An employee who transfers his or her interest in nonstatutory stock options to the employee's former spouse incident to a divorce is not required to include an amount in gross income upon the transfer. Filing taxes for military The former spouse, rather than the employee, is required to include an amount in gross income when the former spouse exercises the stock options. Filing taxes for military See Revenue Ruling 2002-22 and Revenue Ruling 2004-60 for details. Filing taxes for military You can find Revenue Ruling 2002-22 on page 849 of Internal Revenue Bulletin 2002-19 at www. Filing taxes for military irs. Filing taxes for military gov/pub/irs-irbs/irb02-19. Filing taxes for military pdf. Filing taxes for military See Revenue Ruling 2004-60, 2004-24 I. Filing taxes for military R. Filing taxes for military B. Filing taxes for military 1051, available at www. Filing taxes for military irs. Filing taxes for military gov/irb/2004-24_IRB/ar13. Filing taxes for military html. Filing taxes for military For more information about employee stock options, see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations. Filing taxes for military Employer-Provided Cell Phones 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. Filing taxes for military 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. Filing taxes for military For the rules relating to these types of benefits, see De Minimis (Minimal) Benefits , earlier in this section, and Working Condition Benefits , later in this section. Filing taxes for military Noncompensatory business purposes. Filing taxes for military   You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone. Filing taxes for military Examples of substantial business reasons include the employer's: Need to contact the employee at all times for work-related emergencies, Requirement that the employee be available to speak with clients at times when the employee is away from the office, and Need to speak with clients located in other time zones at times outside the employee's normal workday. Filing taxes for military Cell phones provided to promote goodwill, boost morale, or attract prospective employees. Filing taxes for military   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. Filing taxes for military Additional information. Filing taxes for military   For additional information on the tax treatment of employer-provided cell phones, see Notice 2011-72, 2011-38 I. Filing taxes for military R. Filing taxes for military B. Filing taxes for military 407, available at  www. Filing taxes for military irs. Filing taxes for military gov/irb/2011-38_IRB/ar07. Filing taxes for military html. Filing taxes for military Group-Term Life Insurance Coverage This exclusion applies to life insurance coverage that meets all the following conditions. Filing taxes for military It provides a general death benefit that is not included in income. Filing taxes for military You provide it to a group of employees. Filing taxes for military See The 10-employee rule , later. Filing taxes for military It provides an amount of insurance to each employee based on a formula that prevents individual selection. Filing taxes for military This formula must use factors such as the employee's age, years of service, pay, or position. Filing taxes for military You provide it under a policy you directly or indirectly carry. Filing taxes for military Even if you do not pay any of the policy's cost, you are considered to carry it if you arrange for payment of its cost by your employees and charge at least one employee less than, and at least one other employee more than, the cost of his or her insurance. Filing taxes for military Determine the cost of the insurance, for this purpose, as explained under Coverage over the limit , later. Filing taxes for military Group-term life insurance does not include the following insurance. Filing taxes for military Insurance that does not provide general death benefits, such as travel insurance or a policy providing only accidental death benefits. Filing taxes for military Life insurance on the life of your employee's spouse or dependent. Filing taxes for military However, you may be able to exclude the cost of this insurance from the employee's wages as a de minimis benefit. Filing taxes for military See De Minimis (Minimal) Benefits , earlier in this section. Filing taxes for military Insurance provided under a policy that provides a permanent benefit (an economic value that extends beyond 1 policy year, such as paid-up or cash surrender value), unless certain requirements are met. Filing taxes for military See Regulations section 1. Filing taxes for military 79-1 for details. Filing taxes for military Employee. Filing taxes for military   For this exclusion, treat the following individuals as employees. Filing taxes for military A current common-law employee. Filing taxes for military A full-time life insurance agent who is a current statutory employee. Filing taxes for military An individual who was formerly your employee under (1) or (2). Filing taxes for military A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction and control. Filing taxes for military Exception for S corporation shareholders. Filing taxes for military   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Filing taxes for military A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Filing taxes for military Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Filing taxes for military The 10-employee rule. Filing taxes for military   Generally, life insurance is not group-term life insurance unless you provide it to at least 10 full-time employees at some time during the year. Filing taxes for military   For this rule, count employees who choose not to receive the insurance unless, to receive it, they must contribute to the cost of benefits other than the group-term life insurance. Filing taxes for military For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. Filing taxes for military However, do not count an employee who must pay part or all of the cost of permanent benefits to get insurance, unless that employee chooses to receive it. Filing taxes for military A permanent benefit is an economic value extending beyond one policy year (for example, a paid-up or cash-surrender value) that is provided under a life insurance policy. Filing taxes for military Exceptions. Filing taxes for military   Even if you do not meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance. Filing taxes for military   Under the first exception, you do not have to meet the 10-employee rule if all the following conditions are met. Filing taxes for military If evidence that the employee is insurable is required, it is limited to a medical questionnaire (completed by the employee) that does not require a physical. Filing taxes for military You provide the insurance to all your full-time employees or, if the insurer requires the evidence mentioned in (1), to all full-time employees who provide evidence the insurer accepts. Filing taxes for military You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements. Filing taxes for military See Regulations section 1. Filing taxes for military 79-1 for details. Filing taxes for military   Under the second exception, you do not have to meet the 10-employee rule if all the following conditions are met. Filing taxes for military You provide the insurance under a common plan covering your employees and the employees of at least one other employer who is not related to you. Filing taxes for military The insurance is restricted to, but mandatory for, all your employees who belong to, or are represented by, an organization (such as a union) that carries on substantial activities besides obtaining insurance. Filing taxes for military Evidence of whether an employee is insurable does not affect an employee's eligibility for insurance or the amount of insurance that employee gets. Filing taxes for military   To apply either exception, do not consider employees who were denied insurance for any of the following reasons. Filing taxes for military They were 65 or older. Filing taxes for military They customarily work 20 hours or less a week or 5 months or less in a calendar year. Filing taxes for military They have not been employed for the waiting period given in the policy. Filing taxes for military This waiting period cannot be more than 6 months. Filing taxes for military Exclusion from wages. Filing taxes for military   You can generally exclude the cost of up to $50,000 of group-term life insurance from the wages of an insured employee. Filing taxes for military You can exclude the same amount from the employee's wages when figuring social security and Medicare taxes. Filing taxes for military In addition, you do not have to withhold federal income tax or pay FUTA tax on any group-term life insurance you provide to an employee. Filing taxes for military Coverage over the limit. Filing taxes for military   You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. Filing taxes for military Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Filing taxes for military Also, show it in box 12 with code “C. Filing taxes for military ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Filing taxes for military   Figure the monthly cost of the insurance to include in the employee's wages by multiplying the number of thousands of dollars of all insurance coverage over $50,000 (figured to the nearest $100) by the cost shown in Table 2-2. Filing taxes for military For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. Filing taxes for military You must prorate the cost from the table if less than a full month of coverage is involved. Filing taxes for military Table 2-2. Filing taxes for military Cost Per $1,000 of Protection For 1 Month Age Cost Under 25 $ . Filing taxes for military 05 25 through 29 . Filing taxes for military 06 30 through 34 . Filing taxes for military 08 35 through 39 . Filing taxes for military 09 40 through 44 . Filing taxes for military 10 45 through 49 . Filing taxes for military 15 50 through 54 . Filing taxes for military 23 55 through 59 . Filing taxes for military 43 60 through 64 . Filing taxes for military 66 65 through 69 1. Filing taxes for military 27 70 and older 2. Filing taxes for military 06 You figure the total cost to include in the employee's wages by multiplying the monthly cost by the number of full months' coverage at that cost. Filing taxes for military Example. Filing taxes for military Tom's employer provides him with group-term life insurance coverage of $200,000. Filing taxes for military Tom is 45 years old, is not a key employee, and pays $100 per year toward the cost of the insurance. Filing taxes for military Tom's employer must include $170 in his wages. Filing taxes for military The $200,000 of insurance coverage is reduced by $50,000. Filing taxes for military The yearly cost of $150,000 of coverage is $270 ($. Filing taxes for military 15 x 150 x 12), and is reduced by the $100 Tom pays for the insurance. Filing taxes for military The employer includes $170 in boxes 1, 3, and 5 of Tom's Form W-2. Filing taxes for military The employer also enters $170 in box 12 with code “C. Filing taxes for military ” Coverage for dependents. Filing taxes for military   Group-term life insurance coverage paid by the employer for the spouse or dependents of an employee may be excludable from income as a de minimis fringe benefit if the face amount is not more than $2,000. Filing taxes for military If the face amount is greater than $2,000, the entire cost of the dependent coverage must be included in income unless the amount over $2,000 is purchased with employee contributions on an after-tax basis. Filing taxes for military The cost of the insurance is determined by using Table 2-2. Filing taxes for military Former employees. Filing taxes for military   When group-term life insurance over $50,000 is provided to an employee (including retirees) after his or her termination, the employee share of social security and Medicare taxes on that period of coverage is paid by the former employee with his or her tax return and is not collected by the employer. Filing taxes for military You are not required to collect those taxes. Filing taxes for military Use the table above to determine the amount of social security and Medicare taxes owed by the former employee for coverage provided after separation from service. Filing taxes for military Report those uncollected amounts separately in box 12 of Form W-2 using codes “M” and “N. Filing taxes for military ” See the General Instructions for Forms W-2 and W-3 and the Instructions for Form 941. Filing taxes for military Exception for key employees. Filing taxes for military   Generally, if your group-term life insurance plan favors key employees as to participation or benefits, you must include the entire cost of the insurance in your key employees' wages. Filing taxes for military This exception generally does not apply to church plans. Filing taxes for military When figuring social security and Medicare taxes, you must also include the entire cost in the employees' wages. Filing taxes for military Include the cost in boxes 1, 3, and 5 of Form W-2. Filing taxes for military However, you do not have to withhold federal income tax or pay FUTA tax on the cost of any group-term life insurance you provide to an employee. Filing taxes for military   For this purpose, the cost of the insurance is the greater of the following amounts. Filing taxes for military The premiums you pay for the employee's insurance. Filing taxes for military See Regulations section 1. Filing taxes for military 79-4T(Q&A 6) for more information. Filing taxes for military The cost you figure using Table 2-2. Filing taxes for military   For this exclusion, a key employee during 2014 is an employee or former employee who is one of the following individuals. Filing taxes for military See section 416(i) of the Internal Revenue Code for more information. Filing taxes for military An officer having annual pay of more than $170,000. Filing taxes for military An individual who for 2014 was either of the following. Filing taxes for military A 5% owner of your business. Filing taxes for military A 1% owner of your business whose annual pay was more than $150,000. Filing taxes for military   A former employee who was a key employee upon retirement or separation from service is also a key employee. Filing taxes for military   Your plan does not favor key employees as to participation if at least one of the following is true. Filing taxes for military It benefits at least 70% of your employees. Filing taxes for military At least 85% of the participating employees are not key employees. Filing taxes for military It benefits employees who qualify under a set of rules you set up that do not favor key employees. Filing taxes for military   Your plan meets this participation test if it is part of a cafeteria plan (discussed in section 1) and it meets the participation test for those plans. Filing taxes for military   When applying this test, do not consider employees who: Have not completed 3 years of service, Are part-time or seasonal, Are nonresident aliens who receive no U. Filing taxes for military S. Filing taxes for military source earned income from you, or Are not included in the plan but are in a unit of employees covered by a collective bargaining agreement, if the benefits provided under the plan were the subject of good-faith bargaining between you and employee representatives. Filing taxes for military   Your plan does not favor key employees as to benefits if all benefits available to participating key employees are also available to all other participating employees. Filing taxes for military Your plan does not favor key employees just because the amount of insurance you provide to your employees is uniformly related to their pay. Filing taxes for military S corporation shareholders. Filing taxes for military   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the cost of all group-term life insurance coverage you provide the 2% shareholder in his or her wages. Filing taxes for military When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages. Filing taxes for military Include the cost in boxes 1, 3, and 5 of Form W-2. Filing taxes for military However, you do not have to withhold federal income tax or pay federal unemployment tax on the cost of any group-term life insurance coverage you provide to the 2% shareholder. Filing taxes for military Health Savings Accounts A Health Savings Account (HSA) is an account owned by a qualified individual who is generally your employee or former employee. Filing taxes for military Any contributions that you make to an HSA become the employee's property and cannot be withdrawn by you. Filing taxes for military Contributions to the account are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. Filing taxes for military The medical expenses must not be reimbursable by insurance or other sources and their payment from HSA funds (distribution) will not give rise to a medical expense deduction on the individual's federal income tax return. Filing taxes for military For more information about HSAs, visit the Department of Treasury's website at www. Filing taxes for military treasury. Filing taxes for military gov and enter “HSA” in the search box. Filing taxes for military Eligibility. Filing taxes for military   A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance except for permitted insurance listed under section 223(c)(3) or insurance for accidents, disability, dental care, vision care, or long-term care. Filing taxes for military For calendar year 2014, a qualifying HDHP must have a deductible of at least $1,250 for self-only coverage or $2,500 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,350 for self-only coverage and $12,700 for family coverage. Filing taxes for military   There are no income limits that restrict an individual's eligibility to contribute to an HSA nor is there a requirement that the account owner have earned income to make a contribution. Filing taxes for military Exceptions. Filing taxes for military   An individual is not a qualified individual if he or she can be claimed as a dependent on another person's tax return. Filing taxes for military Also, an employee's participation in a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) generally disqualifies the individual (and employer) from making contributions to his or her HSA. Filing taxes for military However, an individual may qualify to participate in an HSA if he or she is participating in only a limited-purpose FSA or HRA or a post-deductible FSA. Filing taxes for military For more information, see Other employee health plans in Publication 969. Filing taxes for military Employer contributions. Filing taxes for military   Up to specified dollar limits, cash contributions to the HSA of a qualified individual (determined monthly) are exempt from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. Filing taxes for military For 2014, you can contribute up to $3,300 for self-only coverage or $6,550 for family coverage to a qualified individual's HSA. Filing taxes for military   The contribution amounts listed above are increased by $1,000 for a qualified individual who is age 55 or older at any time during the year. Filing taxes for military For two qualified individuals who are married to each other and who each are age 55 or older at any time during the year, each spouse's contribution limit is increased by $1,000 provided each spouse has a separate HSA. Filing taxes for military No contributions can be made to an individual's HSA after he or she becomes enrolled in Medicare Part A or Part B. Filing taxes for military Nondiscrimination rules. Filing taxes for military    Your contribution amount to an employee's HSA must be comparable for all employees who have comparable coverage during the same period. Filing taxes for military Otherwise, there will be an excise tax equal to 35% of the amount you contributed to all employees' HSAs. Filing taxes for military   For guidance on employer comparable contributions to HSAs under section 4980G in instances where an employee has not established an HSA by December 31 and in instances where an employer accelerates contributions for the calendar year for employees who have incurred qualified medical expenses, see Regulations section 54. Filing taxes for military 4980G-4. Filing taxes for military Exception. Filing taxes for military   The Tax Relief and Health Care Act of 2006 allows employers to make larger HSA contributions for a nonhighly compensated employee than for a highly compensated employee. Filing taxes for military A highly compensated employee for 2014 is an employee who meets either of the following tests. Filing taxes for military The employee was a 5% owner at any time during the year or the preceding year. Filing taxes for military The employee received more than $115,000 in pay for the preceding year. Filing taxes for military You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Filing taxes for military Partnerships and S corporations. Filing taxes for military   Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. Filing taxes for military Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances. Filing taxes for military Cafeteria plans. Filing taxes for military   You may contribute to an employee's HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. Filing taxes for military However, cafeteria plan nondiscrimination rules still apply. Filing taxes for military For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. Filing taxes for military Contributions that favor lower-paid employees are not prohibited. Filing taxes for military Reporting requirements. Filing taxes for military   You must report your contributions to an employee's HSA in box 12 of Form W-2 using code “W. Filing taxes for military ” The trustee or custodian of the HSA, generally a bank or insurance company, reports distributions from the HSA using Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. Filing taxes for military Lodging on Your Business Premises You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests. Filing taxes for military It is furnished on your business premises. Filing taxes for military It is furnished for your convenience. Filing taxes for military The employee must accept it as a condition of employment. Filing taxes for military Different tests may apply to lodging furnished by educational institutions. Filing taxes for military See section 119(d) of the Internal Revenue Code for details. Filing taxes for military The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging. Filing taxes for military On your business premises. Filing taxes for military   For this exclusion, your business premises is generally your employee's place of work. Filing taxes for military For special rules that apply to lodging furnished in a camp located in a foreign country, see section 119(c) of the Internal Revenue Code and its regulations. Filing taxes for military For your convenience. Filing taxes for military   Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. Filing taxes for military You furnish the lodging to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. Filing taxes for military This is true even if a law or an employment contract provides that the lodging is furnished as pay. Filing taxes for military However, a written statement that the lodging is furnished for your convenience is not sufficient. Filing taxes for military Condition of employment. Filing taxes for military   Lodging meets this test if you require your employees to accept the lodging because they need to live on your business premises to be able to properly perform their duties. Filing taxes for military Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging. Filing taxes for military   It does not matter whether you must furnish the lodging as pay under the terms of an employment contract or a law fixing the terms of employment. Filing taxes for military Example. Filing taxes for military A hospital gives Joan, an employee of the hospital, the choice of living at the hospital free of charge or living elsewhere and receiving a cash allowance in addition to her regular salary. Filing taxes for military If Joan chooses to live at the hospital, the hospital cannot exclude the value of the lodging from her wages because she is not required to live at the hospital to properly perform the duties of her employment. Filing taxes for military S corporation shareholders. Filing taxes for military   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Filing taxes for military A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Filing taxes for military Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Filing taxes for military Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. Filing taxes for military De Minimis Meals You can exclude any occasional meal or meal money you provide 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. Filing taxes for military The exclusion applies, for example, to the following items. Filing taxes for military Coffee, doughnuts, or soft drinks. Filing taxes for military Occasional meals or meal money provided to enable an employee to work overtime. Filing taxes for military However, the exclusion does not apply to meal money figured on the basis of hours worked. Filing taxes for military Occasional parties or picnics for employees and their guests. Filing taxes for military This exclusion also applies to meals you provide at an employer-operated eating facility for employees if the annual revenue from the facility equals or exceeds the direct costs of the facility. Filing taxes for military For this purpose, your revenue from providing a meal is considered equal to the facility's direct operating costs to provide that meal if its value can be excluded from an employee's wages as explained under Meals on Your Business Premises , later. Filing taxes for military If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. Filing taxes for military The 50% limit on deductions for the cost of meals does not apply. Filing taxes for military The deduction limit on meals is discussed in chapter 2 of Publication 535. Filing taxes for military Employee. Filing taxes for military   For this exclusion, treat any recipient of a de minimis meal as
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The Filing Taxes For Military

Filing taxes for military Publication 526 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionOrdering forms and publications. Filing taxes for military Tax questions. Filing taxes for military Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 526 (such as legislation enacted after we release it), go to www. Filing taxes for military irs. Filing taxes for military gov/pub526. Filing taxes for military What's New Limit on itemized deductions. Filing taxes for military  For 2013, you may have to reduce the total amount of certain itemized deductions, including charitable contributions, if your adjusted gross income is more than: $150,000 if married filing separately, $250,000 if single, $275,000 if head of household, or $300,000 if married filing jointly or qualifying widow(er). Filing taxes for military For more information and a worksheet, see the instructions for Schedule A (Form 1040). Filing taxes for military Reminders Disaster relief. Filing taxes for military  You can deduct contributions for flood relief, hurricane relief, or other disaster relief to a qualified organization (defined under Organizations That Qualify To Receive Deductible Contributions ). Filing taxes for military However, you cannot deduct contributions earmarked for relief of a particular individual or family. Filing taxes for military Publication 3833, Disaster Relief: Providing Assistance through Charitable Organizations, has more information about disaster relief, including how to establish a new charitable organization. Filing taxes for military You can also find more information on IRS. Filing taxes for military gov. Filing taxes for military Enter “disaster relief” in the search box. Filing taxes for military Photographs of missing children. Filing taxes for military  The IRS is a proud partner with the National Center for Missing and Exploited Children. Filing taxes for military Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Filing taxes for military You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Filing taxes for military Introduction This publication explains how to claim a deduction for your charitable contributions. Filing taxes for military It discusses the types of organizations to which you can make deductible charitable contributions and the types of contributions you can deduct. Filing taxes for military It also discusses how much you can deduct, what records you must keep, and how to report charitable contributions. Filing taxes for military A charitable contribution is a donation or gift to, or for the use of, a qualified organization. Filing taxes for military It is voluntary and is made without getting, or expecting to get, anything of equal value. Filing taxes for military Qualified organizations. Filing taxes for military   Qualified organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals. Filing taxes for military You will find descriptions of these organizations under Organizations That Qualify To Receive Deductible Contributions . Filing taxes for military Form 1040 required. Filing taxes for military   To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A (Form 1040). Filing taxes for military The amount of your deduction may be limited if certain rules and limits explained in this publication apply to you. Filing taxes for military Comments and suggestions. Filing taxes for military   We welcome your comments about this publication and your suggestions for future editions. Filing taxes for military   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Filing taxes for military NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Filing taxes for military Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Filing taxes for military   You can send your comments from www. Filing taxes for military irs. Filing taxes for military gov/formspubs/. Filing taxes for military Click on “More Information” and then on “Comment on Tax Forms and Publications. Filing taxes for military ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Filing taxes for military Ordering forms and publications. Filing taxes for military   Visit www. Filing taxes for military irs. Filing taxes for military gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Filing taxes for military Internal Revenue Service 1201 N. Filing taxes for military Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Filing taxes for military   If you have a tax question, check the information available on IRS. Filing taxes for military gov or call 1-800-829-1040. Filing taxes for military We cannot answer tax questions sent to either of the above addresses. Filing taxes for military Useful Items - You may want to see: Publication 561 Determining the Value of Donated Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 8283 Noncash Charitable Contributions  See How To Get Tax Help near the end of this publication for information about getting these publications and forms. Filing taxes for military Table 1. Filing taxes for military Examples of Charitable Contributions—A Quick Check Use the following lists for a quick check of whether you can deduct a contribution. Filing taxes for military See the rest of this publication for more information and additional rules and limits that may apply. Filing taxes for military Deductible As Charitable Contributions Not Deductible As Charitable Contributions Money or property you give to: Money or property you give to: Churches, synagogues, temples, mosques, and other religious organizations  Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park)  Nonprofit schools and hospitals  The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girls Clubs of America, etc. Filing taxes for military   War veterans' groups    Expenses paid for a student living with you, sponsored by a qualified organization  Out-of-pocket expenses when you serve a qualified organization as a volunteer Civic leagues, social and sports clubs, labor unions, and chambers of commerce  Foreign organizations (except certain Canadian, Israeli, and Mexican charities)  Groups that are run for personal profit  Groups whose purpose is to lobby for law changes  Homeowners' associations  Individuals  Political groups or candidates for public office    Cost of raffle, bingo, or lottery tickets  Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups  Tuition  Value of your time or services  Value of blood given to a blood bank   Prev  Up  Next   Home   More Online Publications