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Business Accounting Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)

Reimbursement Plan: The plan that is run by an organization for paying back an employee or client or any other person is referred to as a reimbursement plan. The plan in which an employee is paid back for work-related expenses is stated as an employee expense reimbursement plan. To prepare: A letter to the vice president of finance giving detail about the tax consequences and nontax benefits if an accountable employee expense reimbursement plan is not run by the company. The B Corporation cuts its costs and the vice president of finance of the company questions the tax department to justify their use of an accountable employee expense reimbursement plan. The accountable employee expense reimbursement plan is the plan where the employees are reimbursed for any business-related expense and any taxes that are included in the plan are eliminated for both employees and business. Letter To The Vice President B Corporation As the company is cutting costs and you have asked to justify the use of an accountable employee expense reimbursement plan, I will explain the reasons why we have maintained continued use of the plan. The tax consequences of not using an accountable employee expense reimbursement plan are as follows: An accountable plan helps in saving taxes as the amount which is reimbursed is not considered part of the income of the person and the company is not liable for withholding it. If this plan is not maintained, the company must keep a record of the taxes which will make tax management difficult for a company. The accountable plans are not required by the reporting standards; however, they help set criteria that regulations are complied with on what the reimbursements are deductible. There are also some nontax benefits of maintaining the plan which is as follows: As the employees submit original receipts for confirmation of expenses made, there are more chances that the money will be used for the purpose it was taken for. All the expense data is in the record; hence, the data with the business is accurate. This helps finance managers take correct financial decisions. Using this plan, the company can maintain equal treatment for all employees as everyone is liable to submit their receipts and expenses to claim the reimbursement. This makes everyone in the organization have the same experience. Hence, I will suggest you keep the accountable plan running. Thanks Manager Tax department B Corporation

Reimbursement Plan: The plan that is run by an organization for paying back an employee or client or any other person is referred to as a reimbursement plan. The plan in which an employee is paid back for work-related expenses is stated as an employee expense reimbursement plan. To prepare: A letter to the vice president of finance giving detail about the tax consequences and nontax benefits if an accountable employee expense reimbursement plan is not run by the company. The B Corporation cuts its costs and the vice president of finance of the company questions the tax department to justify their use of an accountable employee expense reimbursement plan. The accountable employee expense reimbursement plan is the plan where the employees are reimbursed for any business-related expense and any taxes that are included in the plan are eliminated for both employees and business. Letter To The Vice President B Corporation As the company is cutting costs and you have asked to justify the use of an accountable employee expense reimbursement plan, I will explain the reasons why we have maintained continued use of the plan. The tax consequences of not using an accountable employee expense reimbursement plan are as follows: An accountable plan helps in saving taxes as the amount which is reimbursed is not considered part of the income of the person and the company is not liable for withholding it. If this plan is not maintained, the company must keep a record of the taxes which will make tax management difficult for a company. The accountable plans are not required by the reporting standards; however, they help set criteria that regulations are complied with on what the reimbursements are deductible. There are also some nontax benefits of maintaining the plan which is as follows: As the employees submit original receipts for confirmation of expenses made, there are more chances that the money will be used for the purpose it was taken for. All the expense data is in the record; hence, the data with the business is accurate. This helps finance managers take correct financial decisions. Using this plan, the company can maintain equal treatment for all employees as everyone is liable to submit their receipts and expenses to claim the reimbursement. This makes everyone in the organization have the same experience. Hence, I will suggest you keep the accountable plan running. Thanks Manager Tax department B Corporation

Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)

Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)

26th Edition

ISBN: 9781337702621

Author: Kevin E. Murphy, Mark Higgins

Publisher: Cengage Learning

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Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)

Ch. 6 - Prob. 1DQ Ch. 6 - Prob. 17DQ Ch. 6 - Prob. 40P Ch. 6 - Prob. 60P

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