The Tax Questions Blog

Archive for the ‘Non-Taxable Items’ Category

Question: As the owner of a company I reimburse employees for fuel on a daily basis, can I claim this as non taxable?

My employees do not fill out mileage logs, I do not want to tax them on their per diem gas reimbursement since they pay tax at the gas pump. Is there a way to do this without having them fill out a gas/mileage log?

Answer: Unless you are running an accountable expense reimbursement plan, any reimbursements you make to your employees MUST be included in their gross wages on their Form W-2. It’s then up to them to claim the expenses using Form 2106 and taking an itemized deduction for any out of pocket expense. (For most employees this will mean that they won’t get any deduction since the majority of taxpayers don’t have enough expenses to itemize in the first place.)

If you are running an accountable plan you are restricted to reimbursements for allowable business expenses and the reimbursements must be fully documented. That includes mileage logs for their personal vehicles, and you may only reimburse them for business miles driven, not commuting. You should base your reimbursement on the number of miles driven, not a reimbursement for fuel. Your record keeping requirements will be somewhat reduced if you use the Federal reimbursement rate, currently 55¢ per mile.

In order for them to take a deduction for the use of their vehicle, they’re going to have to keep mileage logs anyway so you might as well make it easy on them and reimburse the Federal rate and require them to turn in the logs monthly. That way you don’t add the money to their W-2s, their tax prep job is much simpler, and if they don’t keep proper records, they get no reimbursement from you.

Not sure what you mean by “they pay tax at the gas pump” since the fuel taxes have nothing to do with income taxes.

DeWitt-Bath News in brief

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Question: My husband made less than 2400.00 unemployment compensation do I need to report this when filing?

husband had to take a 2 weeks leave and made about 1000,00 unemployment do i need to report he made any unemployment since the first $2400.00 is non taxable? I already filed should I amend this? and if I have to make corrections anyway should I add this?

Answer: Yes, you have to file it, but the system will take $2400 off automatically

Question: help with economic stimulus payment for social security recipients!?

Ok, if anyone could help me out there, that’ll be great!!!

I am helping my grandma fill out her economic stimulus payment form 1040A and I’m confused on a couple of things. The name and address and SSN part is easy, but I’m confused for line 7 when it asks for your “wages, salaries, tips,etc” because my grandma hasn’t worked for a long time and is only receiving social security benefits, so do I leave that line blank?

For line 14a, I do I just put how she got of her SSN benefits?

For line 40b, it says enter your nontaxable combat pay. It says this line is reported on the W2 form, but again, if my grandma doesn’t work (hello she’s like 87), then do we just leave that blank? So my grandma retired a long time agoand is on SSN benefits, so do I avoid line 7 and 40b? I’m confused! Oh yeah, and obviously she won’t have her w2 form, isn’t that only for people who work?

Answer: All you report for her is her social security income, unless she also has earned interest or has any stocks and bonds earning dividends. She gets an annual statement, SSA1099, use the numbers from there. You’re right she has no W-2s. She should have received in the mail something from IRS with sample 1040A Stimulus form.
Be sure you put Stimulus Rebate across the top of the pages..

Compare IRAs to see which is a good fit for you

Many people nearing retirement age are being told by financial advisers to put extra cash in Roth IRAs. Here is a comparison of traditional Individual Retirement Arrangements, or IRAs, and the Roth IR …

Pryor Fixes Combat Pay Tax “Glitch” Permanently

Question: Are medical benefits paid to volunteers Taxable Income under the IRS Code?

If a rural fire department that has volunteers, not paid employees, decides to provide the volunteers paid health insurance, or other non-salary benefits, are these taxable income? And, do they trigger workers compensation issues in Idaho?

Answer: Dear OD: The employer(fire dept) will be able to tell you. If they are not up to speed look at the IRS “Taxable Fringe Benefits Guide”.

This pub explains how fringe benefits work and which are taxable which are deferred and which ones are exempt. Most health insurance plans paid for by the employer (if you are a volunteer, you are considered an employee for this determination) are tax exempt. The same applies to “de mininimis benefits” such as coffee at the firehouse.

This advice was prepared based on our understanding of the tax laws in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent

Incidence of tax under exemption system regressive in Indian context

Modern approach to taxation of health and education.

Alex Jones Tv {Sunday Edition} 3/8: Pelosi “Buy a $15000 Policy or Go to Jail”

IRS Ruling 2009-14

Revenue Ruling 2009-14 (which is specifically limited to term policies) found that death benefit proceeds payable by a US insurance company to a non-US investor not engaged in a US trade or business, upon the death of an insured who is a US citizen residing in the US would be US-source income.

Sound Exchange – How to Register With Sound Exchange.