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Taxable Employee Fringe Benefits |
We have been bombarded since the election with the "fiscal cliff". Unless something is done by the lame duck congress by year-end, there will be significant changes in 2013.
Employers did not get the tax holiday the past two years for Social Security, but it is important to be aware of the impact this will have on your employees. The Social Security Tax Holiday for employees' payroll deductions will end on December 31, 2012 unless congress extends it. What this means for employees is that they will be taking home less money after the first of the year. For an employee making $50,000 in 2013, they will be taking home $1,000 less in 2013 than they did in 2012.
Taxable Fringe Benefits:
Some, but not all, non-cash employee fringe benefits are considered taxable income to employees. In addition to cash bonuses, vacation, sick and severance pay, taxable fringe benefits include:
- Gift Cards
- Gift Certificates
- Season Tickets to Sporting Events
- Group-Term Life Insurance Premiums Over $50,000
- Certain Moving Expenses
- Relocation Mileage Reimbursements in Excess of 23.5 Cents/Mile
Non-taxable fringe benefits include:
- Non-Cash Type Gifts (For example, if you give your employee a ham, this is non-taxable)
- Qualified Employee Discounts For Merchandise and Services
- Employer Loans at Below-Market or No Interest (If below $10,000 and there is an agreement to repayment employer)
- Reimbursed Expenses (providing documentation is provided)
For more information, click here to see the IRS Taxable Fringe Benefits Guide. |
2013 Qualified Retirement Plan Limits |
Here are the pre-tax qualified plan limits for 2013:
- 401(k), SEP and 403(b) plans: $17,500
- 401(k), SEP and 403(b) age 50 & over catch up: $5,500
- Simple IRA: $12,000
- Simple IRA 50 & over catch up: $2,500
- Combined employee/employer limits for all defined contribution plans: $51,000
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