Income--Inclusions and Exclusions (2)

Question 1

EMPLOYEE FRINGE BENEFITS

Are HEALTH INSURANCE PREMIUMS and BENEFITS included or excluded from income?

Answer 1

EXCLUDED

covers employee, spouse, and dependents

Question 2

EMPLOYEE FRINGE BENEFITS

Are GROUP-TERM LIFE INSURANCE premiums included or excluded from income?

Answer 2

PARTIAL
Any Premiums paid by the employer for benefits UP TO $50,000 are Excluded (as a non-taxable fringe benefit),
BUT
Cost of the Premiums for the Amount of Coverage in EXCESS of $50,000 is INCLUDED as income for the employee

Question 3

EMPLOYEE FRINGE BENEFITS

Are DEATH BENEFITS paid by a company directly to an employees family included or excluded from income?

Answer 3

INCLUDED

Question 4

EMPLOYEE FRINGE BENEFITS

Are EMPLOYEE DISCOUNTS included or excluded from income?

Answer 4

PARTIAL

If 20% or LESS AND when discount is NOT below Employer’s COST

Question 5

EMPLOYEE FRINGE BENEFITS

Are QUALIFIED TRANSPORTATION BENEFITS included or excluded from income?

Answer 5

PARTIAL
Up to $245 Per Month is EXCLUDED
in Addition Employer may provide:
Free Parking of Up to a value of $245 Per Month,
Up to $20 Per Month in Reimbursements for Taxpayers that BICYCLE to Work

Question 6

Is Interest on Veterans Administration insurance Dividends left on Deposit with the Veterans Administration Includable or Exlcudable from income?

Answer 6

EXCLUDABLE

Question 7

What are the Long-Term Capital Gains Rates for Qualifying Dividends?

Answer 7

10% or 15% tax bracket will be taxed at 0%
25% to 35% tax bracket will be taxed at 15%
new 39.6% tax bracket will be taxed at 20%

Question 8

Concerning RENTS, is a Prepayment of the last months rent Income when received?

Answer 8

YES

Question 9

Are the following INCLUDED/EXCLUDED from Income:

1. GAMBLING WINNINGS
2. JURY DUTY PAY
3. UNEMPLOYMENT COMPENSATION

Answer 9

1. INCLUDED - can deduct losses UP TO extent of winnings
2. INCLUDED
3. INCLUDED

Question 10

SOCIAL SECURITY BENEFITS
What are the % of Taxable Social Security Benefits based on Filing Status and Provisional Income amounts?
for this, What is Provisional Income (MAGI)?

Answer 10

SINGLE & HOH:
Up to $25,000 = 0% taxed, $25,000 - $34,000 = 50%
Over $34,000 = 85% Taxed
MARRIED:
Up to $32,000 = 0% taxed, $32,000 - $44,000 = 50%,
Over $44,000 = 85% taxed
MFS: - NO Base amount - 85% of benefits taxes
Provisional Income=AGI + Tax Exempt Inc + 1/2 SS Benefits Received

Question 11

What Criteria MUST an Award meet to be EXCLUDED from Gross Income?

Answer 11

ALL of the following:

1. For Recognition of Religious, Charitable, Scientific, Artistic, Literary or Civic achievement.
2. Taxpayer selected WITHOUT any action on his part to enter contest
3. NO requirement for taxpayer to render services in future
4. Taxpayer contributes award to Nonprofit Org OR qualified governmental unit

Question 12

Are the Following INCLUDED/EXCLUDED from Gross Income:

1. INHERITANCES AND GIFTS
2. LIFE INSURANCE
3. PERSONAL INJURY
4. SCHOLARSHIPS
5. RENTAL VALUE OF PARSONAGE

Answer 12

1. EXCLUDED
2. EXLCUDED (I elects to receive payments under installment arrangement - the Interest component will be INCLUDED)
3. EXCLUDED (for Workers Comp, Accident & Health Ins claims, lawsuits for Pers injuries and disability benefits) - IF for Lost Wages - would be INCLUDABLE
4. EXCLUDED - MUST be degree canidate - ANY payments for ROOM & BOARD, or COMP for services rendered (i.e. teaching/research assistant) are INCLUDABLE
5. EXLCUDED - to the Extent of the Actual costs of maintaining Parsonage.