There are a number of tax breaks afforded to those in the military. This includes collection holds on unpaid taxes owed by members of the military to laws that exempt certain income from tax altogether. The exemption from paying tax on military pay for injuries is an example. The recent Valentine v. Commissioner, T.C. Memo.…
Category: Employee Benefits
Employee Benefits
Providing employee benefits can be a powerful tool for attracting and retaining talent, but understanding the tax implications is critical. We can help you design a benefits program that maximizes tax savings. Give us a call to see how we can help, (713) 909-4906.
Retired Pilot Taxed on Flights Employer Provided to Relatives
A fringe benefit is a perk provided to an employee. These benefits can make many forms. It may include a company car, company meals, or even insurance. These benefits may or may not be taxable for the employee. The Mihalik v. Commissioner, T.C. Memo. 2022-36, case provides an opportunity to consider these rules. The Mihalik…
Is a Gift to a Former Employee Taxable?
Our gift tax rules impose a tax on certain transfers. This gift tax is required given our income tax rules. Absent a gift tax, taxpayers could simply sidestep income taxes by making non-taxable gifts to everyone rather than paying for goods and services. So what happens when a business makes a gift? Does the recipient…
Tax Court Clarifies Employee Tool Plans
Prior to the Tax Cuts and Jobs Act (“TCJA”) of 2018, it was common for employers to simply pay employees more and leave it to the employees to deduct their employee business expenses on their personal income tax returns. The TCJA limited the employee’s ability to deduct employee business expenses. Many employers responded by adopting…
Reporting ESPPs and ISOs to the IRS: What You Need to Know
Stock acquired as part of an employee stock purchase plan (ESPP) and incentive stock options (ISO) can have significant tax consequences for the recipient employee. If you don’t know what these plans are, you are not alone. You probably have no reason to know about these concepts unless you or a family member work for…
IRS Recognizes Employee Tool and Equipment Plans
Employee Tool and Equipment Plans have become increasingly prevalent in industries where employees require specialized tools and equipment to perform their job effectively. These plans benefit both employers and employees by providing access to necessary resources and reducing the cost burden on employees. There are tax implications to consider, and mistakes can be made if…
Taxation of Employee Donated Sick Leave
Even simple acts of kindness, such as donating paid sick leave to co-workers in need, can trigger complex tax requirements. The IRS recently released Private Letter Ruling 200720017 that sheds light on the federal tax consequences of such donations, highlighting the importance of following specific requirements such as employer-sponsored medical leave-sharing arrangements or qualified employer-sponsored…
How HRAs Can Help Your Business
As a business owner, it’s always important to keep costs down while looking for opportunities to grow your business. One potential way to do this is through a Health Reimbursement Arrangement (HRA). An HRA is a tax-advantaged benefit that allows employers to reimburse employees for medical expenses on a tax-free basis. The employer contributes a…
Taxation of Employer-Provided Education: A Look At Section 127 Plans
Section 127 plans are often overlooked by both employers and employees as a valuable tax benefit. Despite their potential advantages, many taxpayers fail to take advantage of these plans, which allow employers to deduct educational expenses for their employees, up to $5,250 per year, and employees to exclude these amounts from their taxable income. This…