Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Military Tax Discounts

Irs Ammended ReturnE File 2012 Taxes FreeFederal Income Tax AmendmentEz Tax Form 20122011 Form 1040H&r Block 1040nrFree Tax HelpI Need Prior Year 1040ez Form 2010 I Caot Access Anywhere AnyoneHow To Amend Your Tax Return Online1040 Tax Forms For 2011Income Tax Forms 1040ezFree Turbo Tax 2013Can I File A 1040ezEfile Tax ReturnTax Act Online 20112010 Form 1040File 2008 TaxesFree 1040ez FilingAlabama 40 Tax Forms 2012E File 2009 TaxesGet Pin Number 2011 TaxesSelf Employed Tax CalculatorIrs Forms 1040x Instructions1040x TaxWhere Can I Do My State Taxes Online For FreeIncome Tax Preparation FeesTurbo Tax 2011Can I Efile My 2011 TaxesTax Return 2013Printable 1040ez Tax FormHow To File Taxes When UnemployedFiling Tax ExtensionFilemy2010taxreturnforfreeGo 2007 TaxesGo 2011 Taxes 2013File State Tax Only For FreeFree State Tax Returns OnlineState Tax Forms OnlineFree Tax ServicesFederal 1040x

Military Tax Discounts

Military tax discounts Publication 1212 - Introductory Material Table of Contents Future Developments Photographs of Missing Children IntroductionOrdering forms and publications. Military tax discounts Tax questions. Military tax discounts Useful Items - You may want to see: Future Developments For the latest information about developments related to Pub. Military tax discounts 1212, such as legislation enacted after it was published, go to www. Military tax discounts irs. Military tax discounts gov/pub1212. Military tax discounts Photographs of Missing Children The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Military tax discounts Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Military tax discounts 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. Military tax discounts Introduction This publication has two purposes. Military tax discounts Its primary purpose is to help brokers and other middlemen identify publicly offered original issue discount (OID) debt instruments they may hold as nominees for the true owners, so they can file Forms 1099-OID or Forms 1099-INT as required. Military tax discounts The other purpose of the publication is to help owners of publicly offered OID debt instruments determine how much OID to report on their income tax returns. Military tax discounts The list of publicly offered OID debt instruments (OID list) is on the IRS website. Military tax discounts The original issue discount tables, Sections I-A through III-F, are only available on the IRS website at www. Military tax discounts irs. Military tax discounts gov/pub1212 by clicking the link under Recent Developments. Military tax discounts The tables are posted to the website in late November or early December of each year. Military tax discounts The information on these lists come from the issuers of the debt instruments and from financial publications and is updated annually. Military tax discounts (However, see Debt Instruments Not on the OID List, later. Military tax discounts ) Brokers and other middlemen can rely on this list to determine, for information reporting purposes, whether a debt instrument was issued at a discount and the OID to be reported on information returns. Military tax discounts However, because the information in the list has generally not been verified by the IRS as correct, the following tax matters are subject to change upon examination by the IRS. Military tax discounts The OID reported by owners of a debt instrument on their income tax returns. Military tax discounts The issuer's classification of an instrument as debt for federal income tax purposes. Military tax discounts Instructions for issuers of OID debt instruments. Military tax discounts   In general, issuers of publicly offered OID debt instruments must, within 30 days after the issue date, report information about the instruments to the IRS on Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. Military tax discounts See the form instructions for more information. Military tax discounts Issuers should report errors in and omissions from the list in writing at the following address:  IRS OID Publication Project SE:W:CAR:MP:T  1111 Constitution Ave. Military tax discounts NW, IR-6526 Washington, D. Military tax discounts C. Military tax discounts 20224 REMIC and CDO information reporting requirements. Military tax discounts   Brokers and other middlemen must follow special information reporting requirements for real estate mortgage investment conduits (REMIC) regular, and collateralized debt obligations (CDO) interests. Military tax discounts The rules are explained in Publication 938, Real Estate Mortgage Investment Conduits (REMICs) Reporting Information (And Other Collateralized Debt Obligations (CDOs)). Military tax discounts   Holders of interests in REMICs and CDOs should see chapter 1 of Publication 550 for information on REMICs and CDOs. Military tax discounts Comments and suggestions. Military tax discounts   We welcome your comments about this publication and your suggestions for future editions. Military tax discounts   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Military tax discounts NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Military tax discounts Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Military tax discounts   You can send your comments from www. Military tax discounts irs. Military tax discounts gov/formspubs/. Military tax discounts Click on “More Information” and then on “Comment on Tax Forms and Publications. Military tax discounts ”   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. Military tax discounts Ordering forms and publications. Military tax discounts   Visit www. Military tax discounts irs. Military tax discounts 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. Military tax discounts Internal Revenue Service 1201 N. Military tax discounts Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Military tax discounts   If you have a tax question, check the information available on IRS. Military tax discounts gov or call 1-800-829-1040. Military tax discounts We cannot answer tax questions sent to any of the preceding addresses. Military tax discounts Useful Items - You may want to see: Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 550 Investment Income and Expenses 938 Real Estate Mortgage Investment Conduits (REMICs) Reporting Information (And Other Collateralized Debt Obligations (CDOs)). Military tax discounts Form (and Instructions) 1096 Annual Summary and Transmittal of U. Military tax discounts S. Military tax discounts Information Returns 1099-B Proceeds From Broker and Barter Exchange Transactions 1099-INT Interest Income 1099-OID Original Issue Discount 8949 Sales and Other Dispositions of Capital Assets Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends Schedule D (Form 1040) Capital Gains and Losses W-8 Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY See How To Get Tax Help near the end of this publication for information about getting publications and forms. Military tax discounts Prev  Up  Next   Home   More Online Publications
Español

Back to School

Use these resources and tips to help prepare your child for the new school year.

Immunizations and Other Health Requirements

It's a good idea to take your child for a physical and eye exam before school starts. Most schools require up-to-date immunizations and may need documentation. Failing to keep immunizations current could prevent your child from attending school. Check the immunization requirements in your state.

Bring all health-related forms that the school requires when you take your child to the doctor. If your child will be participating in a sport, his/her doctor may have to sign a release form. Be sure to keep your own copy of any records.

Let your child's doctor know if you have any questions or concerns about the scheduled vaccines or any other health-related issues that may be affecting your child.

Financial Assistance for Families

There are several programs and resources available to ease the financial burden of going back to school, including low cost meals and affordable health insurance.

Find out if your family qualifies for any Child Nutrition Programs, which includes the National School Lunch Program. 

For free or low-cost health coverage, see if you qualify for the Children's Health Insurance Program (CHIP). If you don't qualify, you can find and compare health insurance through the Health Insurance Marketplace. Enrollment starts October 1, 2013 for coverage beginning January 1, 2014.

Back to Top

Homework Help

Homework can provide many benefits for children. It can improve memory and comprehension, develop study skills, and teach children how to manage time. You can help by making sure your kids have a quiet, well-lit place to do homework and provide assistance, but not complete answers. Learn how to help your kids with homework and succeed in school.

School Supplies

Many school supplies, such as pens, binders, and notebooks, can be reused. Sort through the materials you already have, separating those that your child can use again from those that should be recycled or tossed. Get more tips on how to reduce waste during the school year

Some states offer a "sales tax holiday" for a few days each year. This means that certain products won't be taxed during a set period of time. If your state offers a sales tax holiday, you may be able to save money on clothes, shoes, and other supplies. Check to see if your state participates in sales tax holidays.

Healthy Eating and Physical Fitness

Nutrition is an important factor in academic performance. Studies have shown that children who eat healthy, balanced breakfasts and lunches are more alert throughout the school day and earn higher grades than those who have an unhealthy diet. 

Learn about healthy lunches, breakfasts, and snacks your child can get at school and get tips on preparing a healthy school lunch and making small changes at home to improve your family's diet.

Exercise is an important part of a child's health. Physical activity helps build muscle, promote strong bones, and control weight. Get ideas to help promote an active lifestyle

Back to Top

The Military Tax Discounts

Military tax discounts Publication 15-B - Main Content Table of Contents 1. Military tax discounts Fringe Benefit OverviewAre Fringe Benefits Taxable? Cafeteria Plans Simple Cafeteria Plans 2. Military tax discounts 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. Military tax discounts Fringe Benefit Valuation RulesGeneral Valuation Rule Cents-Per-Mile Rule Commuting Rule Lease Value Rule Unsafe Conditions Commuting Rule 4. Military tax discounts Rules for Withholding, Depositing, and ReportingTransfer of property. Military tax discounts Amount of deposit. Military tax discounts Limitation. Military tax discounts Conformity rules. Military tax discounts Election not to withhold income tax. Military tax discounts How To Get Tax Help 1. Military tax discounts Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. Military tax discounts 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. Military tax discounts Performance of services. Military tax discounts   A person who performs services for you does not have to be your employee. Military tax discounts A person may perform services for you as an independent contractor, partner, or director. Military tax discounts 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. Military tax discounts Provider of benefit. Military tax discounts   You are the provider of a fringe benefit if it is provided for services performed for you. Military tax discounts 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. Military tax discounts 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. Military tax discounts Recipient of benefit. Military tax discounts   The person who performs services for you is considered the recipient of a fringe benefit provided for those services. Military tax discounts That person may be considered the recipient even if the benefit is provided to someone who did not perform services for you. Military tax discounts For example, your employee may be the recipient of a fringe benefit you provide to a member of the employee's family. Military tax discounts 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. Military tax discounts Section 2 discusses the exclusions that apply to certain fringe benefits. Military tax discounts Any benefit not excluded under the rules discussed in section 2 is taxable. Military tax discounts Including taxable benefits in pay. Military tax discounts   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. Military tax discounts Any amount the law excludes from pay. Military tax discounts Any amount the recipient paid for the benefit. Military tax discounts The rules used to determine the value of a fringe benefit are discussed in section 3. Military tax discounts   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. Military tax discounts However, you can use special rules to withhold, deposit, and report the employment taxes. Military tax discounts These rules are discussed in section 4. Military tax discounts   If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes. Military tax discounts However, you may have to report the benefit on one of the following information returns. Military tax discounts 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. Military tax discounts For more information, see the instructions for the forms listed above. Military tax discounts 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. Military tax discounts 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. Military tax discounts Generally, a cafeteria plan does not include any plan that offers a benefit that defers pay. Military tax discounts However, a cafeteria plan can include a qualified 401(k) plan as a benefit. Military tax discounts Also, certain life insurance plans maintained by educational institutions can be offered as a benefit even though they defer pay. Military tax discounts Qualified benefits. Military tax discounts   A cafeteria plan can include the following benefits discussed in section 2. Military tax discounts Accident and health benefits (but not Archer medical savings accounts (Archer MSAs) or long-term care insurance). Military tax discounts Adoption assistance. Military tax discounts Dependent care assistance. Military tax discounts Group-term life insurance coverage (including costs that cannot be excluded from wages). Military tax discounts Health savings accounts (HSAs). Military tax discounts Distributions from an HSA may be used to pay eligible long-term care insurance premiums or qualified long-term care services. Military tax discounts Benefits not allowed. Military tax discounts   A cafeteria plan cannot include the following benefits discussed in section 2. Military tax discounts Archer MSAs. Military tax discounts See Accident and Health Benefits in section 2. Military tax discounts Athletic facilities. Military tax discounts De minimis (minimal) benefits. Military tax discounts Educational assistance. Military tax discounts Employee discounts. Military tax discounts Employer-provided cell phones. Military tax discounts Lodging on your business premises. Military tax discounts Meals. Military tax discounts Moving expense reimbursements. Military tax discounts No-additional-cost services. Military tax discounts Transportation (commuting) benefits. Military tax discounts Tuition reduction. Military tax discounts Working condition benefits. Military tax discounts It also cannot include scholarships or fellowships (discussed in Publication 970, Tax Benefits for Education). Military tax discounts $2,500 limit on a health flexible spending arrangement (FSA). Military tax discounts   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. Military tax discounts For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. Military tax discounts   A cafeteria plan offering a health FSA must be amended to specify the $2,500 limit (or any lower limit set by the employer). Military tax discounts 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. Military tax discounts 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. Military tax discounts   For more information, see Notice 2012-40, 2012-26 I. Military tax discounts R. Military tax discounts B. Military tax discounts 1046, available at www. Military tax discounts irs. Military tax discounts gov/irb/2012-26_IRB/ar09. Military tax discounts html. Military tax discounts Employee. Military tax discounts   For these plans, treat the following individuals as employees. Military tax discounts A current common-law employee. Military tax discounts See section 2 in Publication 15 (Circular E) for more information. Military tax discounts A full-time life insurance agent who is a current statutory employee. Military tax discounts 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. Military tax discounts Exception for S corporation shareholders. Military tax discounts   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Military tax discounts 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. Military tax discounts 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. Military tax discounts Plans that favor highly compensated employees. Military tax discounts   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. Military tax discounts A plan you maintain under a collective bargaining agreement does not favor highly compensated employees. Military tax discounts   A highly compensated employee for this purpose is any of the following employees. Military tax discounts An officer. Military tax discounts A shareholder who owns more than 5% of the voting power or value of all classes of the employer's stock. Military tax discounts An employee who is highly compensated based on the facts and circumstances. Military tax discounts A spouse or dependent of a person described in (1), (2), or (3). Military tax discounts Plans that favor key employees. Military tax discounts   If your plan favors key employees, you must include in their wages the value of taxable benefits they could have selected. Military tax discounts 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. Military tax discounts However, a plan you maintain under a collective bargaining agreement does not favor key employees. Military tax discounts   A key employee during 2014 is generally an employee who is either of the following. Military tax discounts An officer having annual pay of more than $170,000. Military tax discounts An employee who for 2014 is either of the following. Military tax discounts A 5% owner of your business. Military tax discounts A 1% owner of your business whose annual pay was more than $150,000. Military tax discounts Simple Cafeteria Plans Eligible employers meeting contribution requirements and eligibility and participation requirements can establish a simple cafeteria plan. Military tax discounts Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan. Military tax discounts Eligible employer. Military tax discounts   You are an eligible employer if you employ an average of 100 or fewer employees during either of the 2 preceding years. Military tax discounts 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. Military tax discounts 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. Military tax discounts Eligibility and participation requirements. Military tax discounts   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. Military tax discounts 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. Military tax discounts S. Military tax discounts source. Military tax discounts Contribution requirements. Military tax discounts   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. Military tax discounts 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. Military tax discounts More information. Military tax discounts   For more information about cafeteria plans, see section 125 of the Internal Revenue Code and its regulations. Military tax discounts 2. Military tax discounts Fringe Benefit Exclusion Rules This section discusses the exclusion rules that apply to fringe benefits. Military tax discounts These rules exclude all or part of the value of certain benefits from the recipient's pay. Military tax discounts The excluded benefits are not subject to federal income tax withholding. Military tax discounts 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. Military tax discounts This section discusses the exclusion rules for the following fringe benefits. Military tax discounts Accident and health benefits. Military tax discounts Achievement awards. Military tax discounts Adoption assistance. Military tax discounts Athletic facilities. Military tax discounts De minimis (minimal) benefits. Military tax discounts Dependent care assistance. Military tax discounts Educational assistance. Military tax discounts Employee discounts. Military tax discounts Employee stock options. Military tax discounts Employer-provided cell phones. Military tax discounts Group-term life insurance coverage. Military tax discounts Health savings accounts (HSAs). Military tax discounts Lodging on your business premises. Military tax discounts Meals. Military tax discounts Moving expense reimbursements. Military tax discounts No-additional-cost services. Military tax discounts Retirement planning services. Military tax discounts Transportation (commuting) benefits. Military tax discounts Tuition reduction. Military tax discounts Working condition benefits. Military tax discounts See Table 2-1, later, for an overview of the employment tax treatment of these benefits. Military tax discounts Table 2-1. Military tax discounts Special Rules for Various Types of Fringe Benefits (For more information, see the full discussion in this section. Military tax discounts ) 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. Military tax discounts Exempt, except for certain payments to S corporation employees who are 2% shareholders. Military tax discounts Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). Military tax discounts 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. Military tax discounts 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). Military tax discounts Educational assistance Exempt up to $5,250 of benefits each year. Military tax discounts (See Educational Assistance , later in this section. Military tax discounts ) Employee discounts Exempt3 up to certain limits. Military tax discounts (See Employee Discounts , later in this section. Military tax discounts ) Employee stock options See Employee Stock Options , later in this section. Military tax discounts Employer-provided cell phones Exempt if provided primarily for noncompensatory business purposes. Military tax discounts Group-term life insurance coverage Exempt Exempt1,4, 7 up to cost of $50,000 of coverage. Military tax discounts (Special rules apply to former employees. Military tax discounts ) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. Military tax discounts (See Health Savings Accounts , later in this section. Military tax discounts ) Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. Military tax discounts Meals Exempt if furnished on your business premises for your convenience. Military tax discounts Exempt if de minimis. Military tax discounts Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them. Military tax discounts 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). Military tax discounts (See Transportation (Commuting) Benefits , later in this section. Military tax discounts ) Exempt if de minimis. Military tax discounts Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). Military tax discounts Working condition benefits Exempt Exempt Exempt 1 Exemption does not apply to S corporation employees who are 2% shareholders. Military tax discounts 2 Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees. Military tax discounts 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. Military tax discounts 4 Exemption does not apply to certain key employees under a plan that favors those employees. Military tax discounts 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. Military tax discounts 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. Military tax discounts 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. Military tax discounts Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Military tax discounts Also, show it in box 12 with code “C. Military tax discounts ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Military tax discounts Accident and Health Benefits This exclusion applies to contributions you make to an accident or health plan for an employee, including the following. Military tax discounts Contributions to the cost of accident or health insurance including qualified long-term care insurance. Military tax discounts Contributions to a separate trust or fund that directly or through insurance provides accident or health benefits. Military tax discounts Contributions to Archer MSAs or health savings accounts (discussed in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans). Military tax discounts 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. Military tax discounts Payments or reimbursements of medical expenses. Military tax discounts Payments for specific injuries or illnesses (such as the loss of the use of an arm or leg). Military tax discounts The payments must be figured without regard to any period of absence from work. Military tax discounts Accident or health plan. Military tax discounts   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. Military tax discounts The plan may be insured or noninsured and does not need to be in writing. Military tax discounts Employee. Military tax discounts   For this exclusion, treat the following individuals as employees. Military tax discounts A current common-law employee. Military tax discounts A full-time life insurance agent who is a current statutory employee. Military tax discounts A retired employee. Military tax discounts A former employee you maintain coverage for based on the employment relationship. Military tax discounts A widow or widower of an individual who died while an employee. Military tax discounts A widow or widower of a retired employee. Military tax discounts 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. Military tax discounts Special rule for certain government plans. Military tax discounts   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. Military tax discounts See section 105(j) for details. Military tax discounts Exception for S corporation shareholders. Military tax discounts   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Military tax discounts 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. Military tax discounts 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. Military tax discounts Exclusion from wages. Military tax discounts   You can generally exclude the value of accident or health benefits you provide to an employee from the employee's wages. Military tax discounts Exception for certain long-term care benefits. Military tax discounts   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. Military tax discounts 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. Military tax discounts However, you can exclude these contributions from the employee's wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Military tax discounts S corporation shareholders. Military tax discounts   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. Military tax discounts 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. Military tax discounts Exception for highly compensated employees. Military tax discounts   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. Military tax discounts 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. Military tax discounts   A self-insured plan is a plan that reimburses your employees for medical expenses not covered by an accident or health insurance policy. Military tax discounts   A highly compensated employee for this exception is any of the following individuals. Military tax discounts One of the five highest paid officers. Military tax discounts An employee who owns (directly or indirectly) more than 10% in value of the employer's stock. Military tax discounts An employee who is among the highest paid 25% of all employees (other than those who can be excluded from the plan). Military tax discounts   For more information on this exception, see section 105(h) of the Internal Revenue Code and its regulations. Military tax discounts COBRA premiums. Military tax discounts   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). Military tax discounts 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. Military tax discounts 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. Military tax discounts 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. Military tax discounts The award must meet the requirements for employee achievement awards discussed in chapter 2 of Publication 535, Business Expenses. Military tax discounts Employee. Military tax discounts   For this exclusion, treat the following individuals as employees. Military tax discounts A current employee. Military tax discounts A former common-law employee you maintain coverage for in consideration of or based on an agreement relating to prior service as an employee. Military tax discounts 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. Military tax discounts Exception for S corporation shareholders. Military tax discounts   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Military tax discounts 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. Military tax discounts 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. Military tax discounts Exclusion from wages. Military tax discounts   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. Military tax discounts The excludable annual amount is $1,600 ($400 for awards that are not “qualified plan awards”). Military tax discounts See chapter 2 of Publication 535 for more information about the limit on deductions for employee achievement awards. Military tax discounts    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. Military tax discounts   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. Military tax discounts The part of the cost that is more than your allowable deduction (up to the value of the awards). Military tax discounts The amount by which the value of the awards exceeds your allowable deduction. Military tax discounts Exclude the remaining value of the awards from the employee's wages. Military tax discounts Adoption Assistance An adoption assistance program is a separate written plan of an employer that meets all of the following requirements. Military tax discounts It benefits employees who qualify under rules set up by you, which do not favor highly compensated employees or their dependents. Military tax discounts 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. Military tax discounts It does not pay more than 5% of its payments during the year for shareholders or owners (or their spouses or dependents). Military tax discounts 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. Military tax discounts You give reasonable notice of the plan to eligible employees. Military tax discounts Employees provide reasonable substantiation that payments or reimbursements are for qualifying expenses. Military tax discounts For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Military tax discounts The employee was a 5% owner at any time during the year or the preceding year. Military tax discounts The employee received more than $115,000 in pay for the preceding year. Military tax discounts 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. Military tax discounts 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. Military tax discounts However, you cannot exclude these payments from wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Military tax discounts For more information, see the Instructions for Form 8839, Qualified Adoption Expenses. Military tax discounts 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. Military tax discounts Use code “T” to identify this amount. Military tax discounts Exception for S corporation shareholders. Military tax discounts   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Military tax discounts 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. Military tax discounts 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. Military tax discounts 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. Military tax discounts 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. Military tax discounts On-premises facility. Military tax discounts   The athletic facility must be located on premises you own or lease. Military tax discounts It does not have to be located on your business premises. Military tax discounts However, the exclusion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. Military tax discounts Employee. Military tax discounts   For this exclusion, treat the following individuals as employees. Military tax discounts A current employee. Military tax discounts A former employee who retired or left on disability. Military tax discounts A widow or widower of an individual who died while an employee. Military tax discounts A widow or widower of a former employee who retired or left on disability. Military tax discounts 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. Military tax discounts A partner who performs services for a partnership. Military tax discounts De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. Military tax discounts 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. Military tax discounts 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. Military tax discounts Examples of de minimis benefits include the following. Military tax discounts Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes. Military tax discounts See Employer-Provided Cell Phones , later in this section, for details. Military tax discounts 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. Military tax discounts Holiday gifts, other than cash, with a low fair market value. Military tax discounts 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. Military tax discounts Meals. Military tax discounts See Meals , later in this section, for details. Military tax discounts Occasional parties or picnics for employees and their guests. Military tax discounts Occasional tickets for theater or sporting events. Military tax discounts Transportation fare. Military tax discounts See Transportation (Commuting) Benefits , later in this section, for details. Military tax discounts Employee. Military tax discounts   For this exclusion, treat any recipient of a de minimis benefit as an employee. Military tax discounts 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. Military tax discounts The services must be for a qualifying person's care and must be provided to allow the employee to work. Military tax discounts 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. Military tax discounts For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. Military tax discounts Employee. Military tax discounts   For this exclusion, treat the following individuals as employees. Military tax discounts A current employee. Military tax discounts 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. Military tax discounts Yourself (if you are a sole proprietor). Military tax discounts A partner who performs services for a partnership. Military tax discounts Exclusion from wages. Military tax discounts   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. Military tax discounts   An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. Military tax discounts This limit is reduced to $2,500 for married employees filing separate returns. Military tax discounts   However, the exclusion cannot be more than the smaller of the earned income of either the employee or employee's spouse. Military tax discounts 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. Military tax discounts For more information on the earned income limit, see Publication 503. Military tax discounts Exception for highly compensated employees. Military tax discounts   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. Military tax discounts   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Military tax discounts The employee was a 5% owner at any time during the year or the preceding year. Military tax discounts The employee received more than $115,000 in pay for the preceding year. Military tax discounts 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. Military tax discounts Form W-2. Military tax discounts   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. Military tax discounts Include any amounts you cannot exclude from the employee's wages in boxes 1, 3, and 5. Military tax discounts Report both the nontaxable portion of assistance (up to $5,000) and any assistance above the amount that is non-taxable to the employee. Military tax discounts Example. Military tax discounts   Company A provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. Military tax discounts In addition, it provides occasional on-site dependent care to its employees at no cost. Military tax discounts Emily, an employee of company A, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. Military tax discounts In addition, Emily used the on-site dependent care several times. Military tax discounts The fair market value of the on-site care was $700. Military tax discounts 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). Military tax discounts 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. Military tax discounts Educational Assistance This exclusion applies to educational assistance you provide to employees under an educational assistance program. Military tax discounts The exclusion also applies to graduate level courses. Military tax discounts Educational assistance means amounts you pay or incur for your employees' education expenses. Military tax discounts These expenses generally include the cost of books, equipment, fees, supplies, and tuition. Military tax discounts 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. Military tax discounts 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. Military tax discounts Nor do they include the cost of lodging, meals, or transportation. Military tax discounts Educational assistance program. Military tax discounts   An educational assistance program is a separate written plan that provides educational assistance only to your employees. Military tax discounts The program qualifies only if all of the following tests are met. Military tax discounts The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees. Military tax discounts 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. Military tax discounts The program does not provide more than 5% of its benefits during the year for shareholders or owners. Military tax discounts 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. Military tax discounts 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. Military tax discounts You give reasonable notice of the program to eligible employees. Military tax discounts Your program can cover former employees if their employment is the reason for the coverage. Military tax discounts   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Military tax discounts The employee was a 5% owner at any time during the year or the preceding year. Military tax discounts The employee received more than $115,000 in pay for the preceding year. Military tax discounts 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. Military tax discounts Employee. Military tax discounts   For this exclusion, treat the following individuals as employees. Military tax discounts A current employee. Military tax discounts A former employee who retired, left on disability, or was laid off. Military tax discounts 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. Military tax discounts Yourself (if you are a sole proprietor). Military tax discounts A partner who performs services for a partnership. Military tax discounts Exclusion from wages. Military tax discounts   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. Military tax discounts Assistance over $5,250. Military tax discounts   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. Military tax discounts Working condition benefits may be excluded from wages. Military tax discounts 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. Military tax discounts See Working Condition Benefits , later, in this section. Military tax discounts 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. Military tax discounts 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). Military tax discounts Employee. Military tax discounts   For this exclusion, treat the following individuals as employees. Military tax discounts A current employee. Military tax discounts A former employee who retired or left on disability. Military tax discounts A widow or widower of an individual who died while an employee. Military tax discounts A widow or widower of an employee who retired or left on disability. Military tax discounts 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. Military tax discounts A partner who performs services for a partnership. Military tax discounts Exclusion from wages. Military tax discounts   You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits. Military tax discounts For a discount on services, 20% of the price you charge nonemployee customers for the service. Military tax discounts For a discount on merchandise or other property, your gross profit percentage times the price you charge nonemployee customers for the property. Military tax discounts   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. Military tax discounts 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. Military tax discounts Exception for highly compensated employees. Military tax discounts   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. Military tax discounts All of your employees. Military tax discounts A group of employees defined under a reasonable classification you set up that does not favor highly compensated employees. Military tax discounts   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Military tax discounts The employee was a 5% owner at any time during the year or the preceding year. Military tax discounts The employee received more than $115,000 in pay for the preceding year. Military tax discounts 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. Military tax discounts Employee Stock Options There are three kinds of stock options—incentive stock options, employee stock purchase plan options, and nonstatutory (nonqualified) stock options. Military tax discounts 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. Military tax discounts 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. Military tax discounts 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. Military tax discounts 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. Military tax discounts 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. Military tax discounts 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. Military tax discounts ” See Regulations section 1. Military tax discounts 83-7. Military tax discounts 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. Military tax discounts The former spouse, rather than the employee, is required to include an amount in gross income when the former spouse exercises the stock options. Military tax discounts See Revenue Ruling 2002-22 and Revenue Ruling 2004-60 for details. Military tax discounts You can find Revenue Ruling 2002-22 on page 849 of Internal Revenue Bulletin 2002-19 at www. Military tax discounts irs. Military tax discounts gov/pub/irs-irbs/irb02-19. Military tax discounts pdf. Military tax discounts See Revenue Ruling 2004-60, 2004-24 I. Military tax discounts R. Military tax discounts B. Military tax discounts 1051, available at www. Military tax discounts irs. Military tax discounts gov/irb/2004-24_IRB/ar13. Military tax discounts html. Military tax discounts For more information about employee stock options, see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations. Military tax discounts 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. Military tax discounts 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. Military tax discounts 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. Military tax discounts Noncompensatory business purposes. Military tax discounts   You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone. Military tax discounts 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. Military tax discounts Cell phones provided to promote goodwill, boost morale, or attract prospective employees. Military tax discounts   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. Military tax discounts Additional information. Military tax discounts   For additional information on the tax treatment of employer-provided cell phones, see Notice 2011-72, 2011-38 I. Military tax discounts R. Military tax discounts B. Military tax discounts 407, available at  www. Military tax discounts irs. Military tax discounts gov/irb/2011-38_IRB/ar07. Military tax discounts html. Military tax discounts Group-Term Life Insurance Coverage This exclusion applies to life insurance coverage that meets all the following conditions. Military tax discounts It provides a general death benefit that is not included in income. Military tax discounts You provide it to a group of employees. Military tax discounts See The 10-employee rule , later. Military tax discounts It provides an amount of insurance to each employee based on a formula that prevents individual selection. Military tax discounts This formula must use factors such as the employee's age, years of service, pay, or position. Military tax discounts You provide it under a policy you directly or indirectly carry. Military tax discounts 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. Military tax discounts Determine the cost of the insurance, for this purpose, as explained under Coverage over the limit , later. Military tax discounts Group-term life insurance does not include the following insurance. Military tax discounts Insurance that does not provide general death benefits, such as travel insurance or a policy providing only accidental death benefits. Military tax discounts Life insurance on the life of your employee's spouse or dependent. Military tax discounts However, you may be able to exclude the cost of this insurance from the employee's wages as a de minimis benefit. Military tax discounts See De Minimis (Minimal) Benefits , earlier in this section. Military tax discounts 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. Military tax discounts See Regulations section 1. Military tax discounts 79-1 for details. Military tax discounts Employee. Military tax discounts   For this exclusion, treat the following individuals as employees. Military tax discounts A current common-law employee. Military tax discounts A full-time life insurance agent who is a current statutory employee. Military tax discounts An individual who was formerly your employee under (1) or (2). Military tax discounts 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. Military tax discounts Exception for S corporation shareholders. Military tax discounts   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Military tax discounts 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. Military tax discounts 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. Military tax discounts The 10-employee rule. Military tax discounts   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. Military tax discounts   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. Military tax discounts For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. Military tax discounts 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. Military tax discounts 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. Military tax discounts Exceptions. Military tax discounts   Even if you do not meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance. Military tax discounts   Under the first exception, you do not have to meet the 10-employee rule if all the following conditions are met. Military tax discounts 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. Military tax discounts 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. Military tax discounts You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements. Military tax discounts See Regulations section 1. Military tax discounts 79-1 for details. Military tax discounts   Under the second exception, you do not have to meet the 10-employee rule if all the following conditions are met. Military tax discounts 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. Military tax discounts 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. Military tax discounts Evidence of whether an employee is insurable does not affect an employee's eligibility for insurance or the amount of insurance that employee gets. Military tax discounts   To apply either exception, do not consider employees who were denied insurance for any of the following reasons. Military tax discounts They were 65 or older. Military tax discounts They customarily work 20 hours or less a week or 5 months or less in a calendar year. Military tax discounts They have not been employed for the waiting period given in the policy. Military tax discounts This waiting period cannot be more than 6 months. Military tax discounts Exclusion from wages. Military tax discounts   You can generally exclude the cost of up to $50,000 of group-term life insurance from the wages of an insured employee. Military tax discounts You can exclude the same amount from the employee's wages when figuring social security and Medicare taxes. Military tax discounts 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. Military tax discounts Coverage over the limit. Military tax discounts   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. Military tax discounts Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Military tax discounts Also, show it in box 12 with code “C. Military tax discounts ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Military tax discounts   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. Military tax discounts For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. Military tax discounts You must prorate the cost from the table if less than a full month of coverage is involved. Military tax discounts Table 2-2. Military tax discounts Cost Per $1,000 of Protection For 1 Month Age Cost Under 25 $ . Military tax discounts 05 25 through 29 . Military tax discounts 06 30 through 34 . Military tax discounts 08 35 through 39 . Military tax discounts 09 40 through 44 . Military tax discounts 10 45 through 49 . Military tax discounts 15 50 through 54 . Military tax discounts 23 55 through 59 . Military tax discounts 43 60 through 64 . Military tax discounts 66 65 through 69 1. Military tax discounts 27 70 and older 2. Military tax discounts 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. Military tax discounts Example. Military tax discounts Tom's employer provides him with group-term life insurance coverage of $200,000. Military tax discounts Tom is 45 years old, is not a key employee, and pays $100 per year toward the cost of the insurance. Military tax discounts Tom's employer must include $170 in his wages. Military tax discounts The $200,000 of insurance coverage is reduced by $50,000. Military tax discounts The yearly cost of $150,000 of coverage is $270 ($. Military tax discounts 15 x 150 x 12), and is reduced by the $100 Tom pays for the insurance. Military tax discounts The employer includes $170 in boxes 1, 3, and 5 of Tom's Form W-2. Military tax discounts The employer also enters $170 in box 12 with code “C. Military tax discounts ” Coverage for dependents. Military tax discounts   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. Military tax discounts 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. Military tax discounts The cost of the insurance is determined by using Table 2-2. Military tax discounts Former employees. Military tax discounts   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. Military tax discounts You are not required to collect those taxes. Military tax discounts 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. Military tax discounts Report those uncollected amounts separately in box 12 of Form W-2 using codes “M” and “N. Military tax discounts ” See the General Instructions for Forms W-2 and W-3 and the Instructions for Form 941. Military tax discounts Exception for key employees. Military tax discounts   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. Military tax discounts This exception generally does not apply to church plans. Military tax discounts When figuring social security and Medicare taxes, you must also include the entire cost in the employees' wages. Military tax discounts Include the cost in boxes 1, 3, and 5 of Form W-2. Military tax discounts 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. Military tax discounts   For this purpose, the cost of the insurance is the greater of the following amounts. Military tax discounts The premiums you pay for the employee's insurance. Military tax discounts See Regulations section 1. Military tax discounts 79-4T(Q&A 6) for more information. Military tax discounts The cost you figure using Table 2-2. Military tax discounts   For this exclusion, a key employee during 2014 is an employee or former employee who is one of the following individuals. Military tax discounts See section 416(i) of the Internal Revenue Code for more information. Military tax discounts An officer having annual pay of more than $170,000. Military tax discounts An individual who for 2014 was either of the following. Military tax discounts A 5% owner of your business. Military tax discounts A 1% owner of your business whose annual pay was more than $150,000. Military tax discounts   A former employee who was a key employee upon retirement or separation from service is also a key employee. Military tax discounts   Your plan does not favor key employees as to participation if at least one of the following is true. Military tax discounts It benefits at least 70% of your employees. Military tax discounts At least 85% of the participating employees are not key employees. Military tax discounts It benefits employees who qualify under a set of rules you set up that do not favor key employees. Military tax discounts   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. Military tax discounts   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. Military tax discounts S. Military tax discounts 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. Military tax discounts   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. Military tax discounts Your plan does not favor key employees just because the amount of insurance you provide to your employees is uniformly related to their pay. Military tax discounts S corporation shareholders. Military tax discounts   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. Military tax discounts When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages. Military tax discounts Include the cost in boxes 1, 3, and 5 of Form W-2. Military tax discounts 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. Military tax discounts Health Savings Accounts A Health Savings Account (HSA) is an account owned by a qualified individual who is generally your employee or former employee. Military tax discounts Any contributions that you make to an HSA become the employee's property and cannot be withdrawn by you. Military tax discounts 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. Military tax discounts 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. Military tax discounts For more information about HSAs, visit the Department of Treasury's website at www. Military tax discounts treasury. Military tax discounts gov and enter “HSA” in the search box. Military tax discounts Eligibility. Military tax discounts   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. Military tax discounts 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. Military tax discounts   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. Military tax discounts Exceptions. Military tax discounts   An individual is not a qualified individual if he or she can be claimed as a dependent on another person's tax return. Military tax discounts 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. Military tax discounts 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. Military tax discounts For more information, see Other employee health plans in Publication 969. Military tax discounts Employer contributions. Military tax discounts   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. Military tax discounts 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. Military tax discounts   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. Military tax discounts 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. Military tax discounts No contributions can be made to an individual's HSA after he or she becomes enrolled in Medicare Part A or Part B. Military tax discounts Nondiscrimination rules. Military tax discounts    Your contribution amount to an employee's HSA must be comparable for all employees who have comparable coverage during the same period. Military tax discounts Otherwise, there will be an excise tax equal to 35% of the amount you contributed to all employees' HSAs. Military tax discounts   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. Military tax discounts 4980G-4. Military tax discounts Exception. Military tax discounts   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. Military tax discounts A highly compensated employee for 2014 is an employee who meets either of the following tests. Military tax discounts The employee was a 5% owner at any time during the year or the preceding year. Military tax discounts The employee received more than $115,000 in pay for the preceding year. Military tax discounts 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. Military tax discounts Partnerships and S corporations. Military tax discounts   Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. Military tax discounts 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. Military tax discounts Cafeteria plans. Military tax discounts   You may contribute to an employee's HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. Military tax discounts However, cafeteria plan nondiscrimination rules still apply. Military tax discounts For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. Military tax discounts Contributions that favor lower-paid employees are not prohibited. Military tax discounts Reporting requirements. Military tax discounts   You must report your contributions to an employee's HSA in box 12 of Form W-2 using code “W. Military tax discounts ” 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. Military tax discounts 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. Military tax discounts It is furnished on your business premises. Military tax discounts It is furnished for your convenience. Military tax discounts The employee must accept it as a condition of employment. Military tax discounts Different tests may apply to lodging furnished by educational institutions. Military tax discounts See section 119(d) of the Internal Revenue Code for details. Military tax discounts The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging. Military tax discounts On your business premises. Military tax discounts   For this exclusion, your business premises is generally your employee's place of work. Military tax discounts 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. Military tax discounts For your convenience. Military tax discounts   Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. Military tax discounts 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. Military tax discounts This is true even if a law or an employment contract provides that the lodging is furnished as pay. Military tax discounts However, a written statement that the lodging is furnished for your convenience is not sufficient. Military tax discounts Condition of employment. Military tax discounts   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. Military tax discounts Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging. Military tax discounts   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. Military tax discounts Example. Military tax discounts 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. Military tax discounts 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. Military tax discounts S corporation shareholders. Military tax discounts   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Military tax discounts 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. Military tax discounts 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. Military tax discounts Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. Military tax discounts 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. Military tax discounts The exclusion applies, for example, to the following items. Military tax discounts Coffee, doughnuts, or soft drinks. Military tax discounts Occasional meals or meal money provided to enable an employee to work overtime. Military tax discounts However, the exclusion does not apply to meal money figured on the basis of hours worked. Military tax discounts Occasional parties or picnics for employees and their guests. Military tax discounts 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. Military tax discounts 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. Military tax discounts If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. Military tax discounts The 50% limit on deductions for the cost of meals does not apply. Military tax discounts The deduction limit on meals is discussed in chapter 2 of Publication 535. Military tax discounts Employee. Military tax discounts   For this exclusion, treat any recipient of a de minimis meal as