The requirement is what tax form should these go on. $ 4,320 1. Bill participate
ID: 2584940 • Letter: T
Question
The requirement is what tax form should these go on.
$ 4,320 1. Bill participates in his employer's group health insurance plan to which he contributed in 2016 for medical coverage. These contributions were made with after-tax dollars. The health plan covers Bill, Mary, and the two children. The company provides an office for Bill's use that is located at 110 North Round Street, Suite 217, Carbondale, IL. 2. Besides business use of his car (see item. 3 below), Bill's out of pocket employment related expenses for 2016 are as follows: Airfare $ 3,120 Lodging $ 3,840 Meals $ 4,080 Entertainment 960 Car rentals, taxis 720 Subscriptions to trade journals $ 144 Dues to trade association 96 Business Gifts 660 Compac reimbursed Bill for all the employment related expenses pursuant to its accountable plan. HINT: we still have to report the expenses and reimbursement on the appropriate form. $ 40,800 3. On March 3rd, 2014 Bill purchased a new Ford SUV for use in his job. The SUV cost (including sales taxes), with no trade-in involved. The SUV was driven 12,000 miles in 2014, 18,000 miles in 2015, and 14,400 miles in 2016. Bill reports that the car was used 80% for business purposes for all years. The mileage for 2016 was evenly distributed throughout the year. Bill uses actual cost method, and for depreciation he uses the half-year convention. In addition, Bill did not claim any 179 deduction or bonus depreciation on the vehicle. The vehcile weighs over 6,000 lbs. Bill's expenses for the Ford SUV are as follows: Gasoline $ 3,600 Oil Changes $ 300 Auto Insurance $ 2,400 Repairs 480 AAA dues 192 Registration 192 Interest on car loan 600 Parking 360Explanation / Answer
1. Employer and employee contributions made to the group helatth insurance plan is required to be reported by the employer in Form W-2.
2. If the employer reimburse the employee all the business expenses pursuant to accountable plan then such expenses are not required to be reported by the employee under hid gross income and should not take itemized deduction for them. Therefore, in the given case, expenses reimbursed under accountable plan is not required to be reported in form W-2.
3. Under actual cost, method employee can deduct actual expenses on the basis of miles driven for business use. In the given case, 80% is for business purpose and therefire, out of total 14,400 miles in 2016, 80% i.e 11,520 is for business purpose only. These expenses are required to be reported in form 2106, Employee Business Expenses and remaing personal purpose expenses should be recorded as itemized deduction in Schedule A of form 1040