FPC Chapter 3.2
All of the following types of compensation are taxable EXCEPT:
A. prize in company-sponsored sales contest.
B. qualified employee discounts.
C. personal use of company vehicle.
D. backpay awards - ANS-B. qualified employee discounts
Nontaxable Benefits
- No-additional-cost services;
- Qualified employee discounts;
- Working condition fringes;
- De minimis fringes;
- Qualified transportation benefits;
- On-premises athletic facilities;
- Qualified retirement advice services; and
- Qualified moving expense reimbursements.
Four employees carpool to work in an employee's 8-passenger van that is only used to
commute to and from work. The employer reimburses all of the commuting expenses. The
monthly costs are $266.00. How much of the carpool reimbursement is taxable? - ANS-$11.00
The excluded benefit is limited up to $255.00 per month
$266.00 - $255.00 = $11.00
In which of the following situations is a benefit nontaxable?
A. An employee was awarded $1,000.00 for prospecting new customers.
B. An employee won a $500.00 savings bond in a company-sponsored contest for cost cutting.
C. A $30.00 gift card was provided to all employees.
D. A payroll employee was sent to an APA Payroll Learning Center class out of town that cost
$1,500.00. - ANS-D. A payroll employee was sent to an APA Payroll Learning Center class out
of town that cost $1,500.00.
An employer transfers an employee who meets the time test to another office located 1,400
miles away. The employer agrees to pay all qualified moving expenses. While house hunting in
the new location, the employee spent $400.00 on hotel bills, $200.00 on meals, and $500.00 on
airfare. Calculate the amount the employer will reimburse to the employee. - ANS-$0.00
, An employer pays for an employee's $275.00 monthly parking near the job site. Calculate the
taxable amount of the monthly parking. - ANS-$20.00
The excluded benefit is limited up to $255.00 per month
$266.00 - $255.00 = $11.00
Which of the following situations is a qualified moving expense for an employee whose
relocation meets the time and distance tests?
A. Transportation of household goods
B. Pre-move house-hunting expenses
C. Temporary living expenses after starting work in the new location
D. Qualified real estate expenses - ANS-A. Transportation of household goods
1. There are only two types of deductible moving expenses:
2. Transportation of household goods.
Expenses of traveling from old home to new home.
During an employee's qualified move, the employee drove 845 miles and submitted an expense
report to the employer in the amount of $811.30. Detailed on the expense report were $300.00
for hotel rooms for two nights, $55.00 in meals, and $456.30 for the mileage. Calculate the
taxable amount of the employee's moving expenses. - ANS-$350.75
$456.30 - Mileage expense reported to employer
$0.19 - Mileage Rate for 2016
$0.19 * 845 = $160.55 - Mileage aval. for deduction
$55.00 - Meals attempting to be deducted
***Meals cannot be deducted***
$456.30 - $160.55 = $295.75 - Diff in Mileage exp
$295.75 + $55.00 = $350.75
Which of the following services qualify as employer-provided retirement advice?
A. Tax preparation
B. 401(k) investment advice
C. Accounting assistance
D. Brokerage services - ANS-B. 401(k) investment advice
***Qualified retirement planning services" (i.e., retirement advice and information, but not tax
preparation, accounting, legal, or brokerage services) provided to an employee and his or her
All of the following types of compensation are taxable EXCEPT:
A. prize in company-sponsored sales contest.
B. qualified employee discounts.
C. personal use of company vehicle.
D. backpay awards - ANS-B. qualified employee discounts
Nontaxable Benefits
- No-additional-cost services;
- Qualified employee discounts;
- Working condition fringes;
- De minimis fringes;
- Qualified transportation benefits;
- On-premises athletic facilities;
- Qualified retirement advice services; and
- Qualified moving expense reimbursements.
Four employees carpool to work in an employee's 8-passenger van that is only used to
commute to and from work. The employer reimburses all of the commuting expenses. The
monthly costs are $266.00. How much of the carpool reimbursement is taxable? - ANS-$11.00
The excluded benefit is limited up to $255.00 per month
$266.00 - $255.00 = $11.00
In which of the following situations is a benefit nontaxable?
A. An employee was awarded $1,000.00 for prospecting new customers.
B. An employee won a $500.00 savings bond in a company-sponsored contest for cost cutting.
C. A $30.00 gift card was provided to all employees.
D. A payroll employee was sent to an APA Payroll Learning Center class out of town that cost
$1,500.00. - ANS-D. A payroll employee was sent to an APA Payroll Learning Center class out
of town that cost $1,500.00.
An employer transfers an employee who meets the time test to another office located 1,400
miles away. The employer agrees to pay all qualified moving expenses. While house hunting in
the new location, the employee spent $400.00 on hotel bills, $200.00 on meals, and $500.00 on
airfare. Calculate the amount the employer will reimburse to the employee. - ANS-$0.00
, An employer pays for an employee's $275.00 monthly parking near the job site. Calculate the
taxable amount of the monthly parking. - ANS-$20.00
The excluded benefit is limited up to $255.00 per month
$266.00 - $255.00 = $11.00
Which of the following situations is a qualified moving expense for an employee whose
relocation meets the time and distance tests?
A. Transportation of household goods
B. Pre-move house-hunting expenses
C. Temporary living expenses after starting work in the new location
D. Qualified real estate expenses - ANS-A. Transportation of household goods
1. There are only two types of deductible moving expenses:
2. Transportation of household goods.
Expenses of traveling from old home to new home.
During an employee's qualified move, the employee drove 845 miles and submitted an expense
report to the employer in the amount of $811.30. Detailed on the expense report were $300.00
for hotel rooms for two nights, $55.00 in meals, and $456.30 for the mileage. Calculate the
taxable amount of the employee's moving expenses. - ANS-$350.75
$456.30 - Mileage expense reported to employer
$0.19 - Mileage Rate for 2016
$0.19 * 845 = $160.55 - Mileage aval. for deduction
$55.00 - Meals attempting to be deducted
***Meals cannot be deducted***
$456.30 - $160.55 = $295.75 - Diff in Mileage exp
$295.75 + $55.00 = $350.75
Which of the following services qualify as employer-provided retirement advice?
A. Tax preparation
B. 401(k) investment advice
C. Accounting assistance
D. Brokerage services - ANS-B. 401(k) investment advice
***Qualified retirement planning services" (i.e., retirement advice and information, but not tax
preparation, accounting, legal, or brokerage services) provided to an employee and his or her
