CPP - Section 3 Quiz

The Internal Revenue Code specifically defines the term “fringe benefits.”

An employer may not discriminate in favor of highly compensated employees when providing no-additional- cost services.

Qualified employee discounts may be offered to employees in any line of the employer’s business.

An employer may provide transit passes valued at up to $265 in a month to its employees in 2019 without including the fair market value of the benefits in their income.

The value of an employee’s personal use of a company-provided vehicle is taxable income to the employee

When an employer-provided vehicle is used for business-related purposes, it is a working condition fringe benefit.

Restaurant employers can participate in the Tip Rate Determination Agreement by checking a box on Form 941 filed for the fourth quarter of a calendar year.

When valuing vehicles, if the employer uses a special valuation method, the employee must also use the same rule or the general valuation method.

The annual lease method for valuing vehicles includes the value of employer-provided fuel.

When an employee uses a company aircraft for business and personal use, the cost of travel for personal use is excluded from the employee’s income.

Qualified employee discounts qualify as nontaxable fringe benefits.

The value of employer-provided group-term life insurance up to $50,000 is excluded from an employee’s federal taxable income.

Employers are not required to withhold federal income tax on excess group-term life insurance coverage.

A $25.00 check with a note attached saying “Buy a Christmas turkey with this.” is excluded from taxable earnings as a de minimis fringe.

If an employee terminates employment during the year because of a permanent disability, then the value of group-term life insurance over $50,000 is not included in the employee’s income.

Scholarships and fellowships are included in an individual’s income even if the individual is a candidate for a degree at an educational institution

If a meal and incidental expense (M+IE) per diem allowance is used, the amount deemed substantiated is the lesser of the per diem allowance or the federal M+IE rate for the locality of travel.

Employee business travel expense reimbursements under a nonaccountable plan are subject to income withholding and employment taxes.

Salary advances (prepaid wages) must be included in the employee’s income for the payroll period in which they are received.

When an employee’s wife regularly uses a company car to go shopping, the value of this employee fringe benefit is included in the employee’s gross income.

A car salesman who receives a $1,000 award for having the top sales for the month must have this amount included in his income.

Gifts provided to an employee by his or her employer are excluded from income.

Death benefits paid to an employee’s estate or beneficiary upon the death of the employee are excluded from income up to $5,000.

Dismissal pay is included in a terminated employee’s income and is subject to federal income tax withholding and social security, Medicare, and FUTA taxes.

The cost of traveling from Boston to Germany for a trip that is for both business and pleasure may be deducted in full as a travel expense.

To qualify for the travel expense deduction, the employee must be away from home for at least 24 hours.

If the employee does not maintain adequate records of miles driven, the business standard mileage rate cannot be used in reimbursing the employee for local business travel.

If an employee works at two or more jobs during the same day, the cost of transportation from one job to the other may be treated as a deductible expense.

Wages paid to a deceased employee’s estate or legal representative after the employee dies but in the year of death are subject to social security, Medicare, and FUTA taxes.

All of the following benefits are nontaxable fringe benefits except:

All of the following benefits are working condition fringe benefits except:

All of the following benefits are de minimis fringe benefits except:

All of the following data elements are recordkeeping requirements for the business use of company-provided vehicles except:

The business standard mileage rate for 2019 is:

The IRS-approved rate for employer-provided fuel for 2019 is:

An employer must withhold on group-term life insurance in excess of $50,000 for which of the following taxes?

Which of the following conditions need not be met for job-related educational assistance to be excluded from income

Under the “fixed-date” method for substantiating business travel expenses, an advance can be provided no more than how many days before an expense is incurred?

For what travel expenses may an employer use the high-low per diem rate instead of the individual federal per diem rate of the locality of travel?

David has child and dependent care expenses of $6,500 during 2019, and his employer reimburses him in full during the same year. How much of the reimbursement is taxable to David for 2019?

An employee who regularly earns $400 per week is called to jury duty and is given $150 per week in jury duty pay. The employer makes up the difference between the jury duty pay and the employee’s regular pay. What amount is subject to federal income tax withholding and social security, Medicare, and FUTA taxes?

All of the following items incurred while on business travel are travel expenses except:

All of the following expenses incurred while on business travel qualify as a travel expense except:

All of the following payments are classified as wages subject to federal income tax withholding except:

Emma, a sales representative, receives a $1,500 bonus in December 2019 for outstanding performance. The bonus is supplemental wages subject to federal income tax withholding at a flat 22% rate; the social security tax rate is 6.2%; and the Medicare tax rate is 1.45%. Assuming there are no state or local taxes and that Emma has received wages of $100,000 during the year so far, what is the amount Emma must be paid to guarantee her a net bonus of $1,500.