You must continue to use the cents-per-mile rule if you provide a replacement vehicle to the employee (and the vehicle qualifies for the use of this rule) and your primary reason for the replacement is to reduce federal taxes. You may elect to exclude from the plan employees who: Are under age 21 before the close of the plan year. The exclusion doesn't apply to the provision of any benefit to defray public transit expenses incurred for personal travel other than commuting. Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances. The IRS also issued a memo to agents noting that cell phone reimbursements to be reasonably calculated so as not to exceed the employee’s actual expenses in maintaining the cell phone. Qualified transportation benefits aren’t deductible. Employers consider several factorswhendrafting these policies and determining stipend amounts.Here are just a few: 1. For guidance on the use of smart cards and debit cards to provide qualified transportation fringes, see Revenue Ruling 2014-32, 2014-50 I.R.B. For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. Don't determine the FMV by multiplying a cents-per-mile rate times the number of miles driven unless the employee can prove the vehicle could have been leased on a cents-per-mile basis. You can use the cents-per-mile rule if either of the following requirements is met. A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction and control. You’re considered to incur substantial additional costs if you or your employees spend a substantial amount of time in providing the service, even if the time spent would otherwise be idle or if the services are provided outside normal business hours. However, you may be able to exclude their value as discussed under, You generally can't exclude from an employee's wages the value of meals you furnish on a day when the employee isn't working. The IRS can declare that all undocumented use of a cell phone is personal and should be taxed as wages, even if the majority of the calls are for business purposes. However, personal commuting expenses are not deductible as a business expense. Always protect your identity when using any social networking site. Including the value of the benefits in boxes 1, 3, 5, and 14 on a timely furnished Form W-2. The value of the personal use must be based on the FMV or determined by using one of the following three special valuation rules previously discussed in section 3. The person who performs services for you is considered the recipient of a fringe benefit provided for those services. If you allow your employee to choose to receive additional pay instead of meals, then the meals, if chosen, aren’t excluded. For example, don't reduce the annual lease value by the value of a maintenance service contract or insurance you didn't provide. You elected to use the lease value rule as of January 1, 2020. Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. A board or shareholder-appointed, confirmed, or elected officer whose pay is $115,000 or more. The exclusion also doesn't apply to cash allowances for lodging. Determine this amount on the basis of all the facts and circumstances. … If you’re in an ad agency, you can write that off for sure. 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