Fringe benefits & benefits-in-kind ▸ Household expenses ▸ All contracts of household expenses e.g. utilities, domestic helpers are entered into by the employer (i.e. liabilities are borne by the employer) ▸ For the same amount of dispensable income of an individual, salaries tax is saved with a reduced income and elimination of expenses. 51 Fringe benefits & benefits-in-kind ▸ Illustration Before arrangement Income Household expenses Net dispensable income $ Tax treatment 500,000 Taxable (240,000) Non-deductible 260,000 After arrangement Income Household expenses Net dispensable income $ Tax treatment 260,000 Taxable 260,000 52
Fringe benefits & benefits-in-kind ▸ Household expenses ▸ All contracts of household expenses e.g. utilities, domestic helpers are entered into by the employer (i.e. liabilities are borne by the employer) ▸ For the same amount of dispensable income of an individual, salaries tax is saved with a reduced income and elimination of expenses. 51 Fringe benefits & benefits-in-kind ▸ Illustration Before arrangement Income Household expenses Net dispensable income $ Tax treatment 500,000 Taxable (240,000) Non-deductible 260,000 After arrangement Income Household expenses Net dispensable income $ Tax treatment 260,000 Taxable 260,000 52
Chapter4: Income Exclusions
Section: Chapter Questions
Problem 17DQ
Related questions
Question

Transcribed Image Text:Fringe benefits & benefits-in-kind
▸ Household expenses
▸ All contracts of household expenses e.g. utilities,
domestic helpers are entered into by the employer (i.e.
liabilities are borne by the employer)
▸ For the same amount of dispensable income of an
individual, salaries tax is saved with a reduced income
and elimination of expenses.
51

Transcribed Image Text:Fringe benefits & benefits-in-kind
▸ Illustration
Before arrangement
Income
Household expenses
Net dispensable income
$ Tax treatment
500,000 Taxable
(240,000) Non-deductible
260,000
After arrangement
Income
Household expenses
Net dispensable income
$ Tax treatment
260,000 Taxable
260,000
52
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps

Recommended textbooks for you

Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT

College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,

Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT

College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,