by admin | Jun 13, 2019 | Human Resources, IRS
Question: Are amounts an employer reimburses employees for mileage taxable?
Answer: They may be; the type of reimbursement plan will dictate whether reimbursement for business travel is or is not taxable. Both accountable plans and non-accountable plans allow an employer to reimburse employees for their business expenses.
With an accountable plan, the reimbursement is not taxable to your employee. Amounts paid under an accountable plan are not wages and are not subject to income tax withholding and payment of Social Security, Medicare, and Federal Unemployment Tax Act (FUTA) taxes. Your reimbursement or allowance arrangement must meet all of the following conditions in order to quality as an accountable plan:
- There must be a business connection to the expenditure. This means that the expense must be a deductible business expense incurred in connection with services performed as an employee of the employer. If not reimbursed by the employer, the expense may be deductible by the employee from their taxable income.
- There must be adequate accounting by the employee. This means that the employee must give their employer a statement of expense, an account book, a diary, or a similar record in which they entered each use at or near the time it occurred, along with date, mileage, and the business purpose of the use.
- Excess reimbursements or advances must be returned within a reasonable period of time.
A non-accountable plan does not meet the three requirements for accountable plans and is subject to all employment taxes and withholding. Payments under a non-accountable plan occur if: (1) the employee is not required to substantiate expenses with receipts or other documentation in a timely manner; and (2) the employer advances an amount to the employee for business expenses and the employee is not required to, and does not, return any amount he or she does not use for business expenses in a timely manner.
Employers should also check with their state department of taxation to understand any state tax rules applicable to them.
For more detailed information on federal mileage reimbursement, see the IRS page containing Publication 463, Travel, Entertainment, Gift, and Car Expenses, and updates to this publication since its publication date.
Originally posted on ThinkHR.com
by admin | Jun 4, 2019 | Employee Benefits, IRS
On May 28, 2019, the Internal Revenue Service (IRS) released Revenue Procedure 2019-25 announcing the annual inflation-adjusted limits for health savings accounts (HSAs) for calendar year 2020. An HSA is a tax-exempt savings account that employees can use to pay for qualified health expenses.
To be eligible for an HSA, an employee:
- Must be covered by a qualified high deductible health plan (HDHP);
- Must not have any disqualifying health coverage (called “impermissible non-HDHP coverage”);
- Must not be enrolled in Medicare; and
- May not be claimed as a dependent on someone else’s tax return.
The limits vary based on whether an individual has self-only or family coverage under an HDHP. The limits are as follows:
- 2020 HSA contribution limit:
- Single: $3,550 (an increase of $50 from 2019)
- Family: $7,100 (an increase of $100 from 2019)
- Catch-up contributions for those age 55 and older remains at $1,000
- 2020 HDHP minimum deductible (not applicable to preventive services):
- Single: $1,400 (an increase of $50 from 2019)
- Family: $2,800 (an increase of $100 from 2019)
- 2020 HDHP maximum out-of-pocket limit:
- Single: $6,900 (an increase of $150 from 2019)
- Family: $13,800* (an increase of $300 from 2019)
*If the HDHP is a nongrandfathered plan, a per-person limit of $8,150 also will apply due to the Affordable Care Act’s cost-sharing provision for essential health benefits.
Originally posted on ThinkHR.com
by admin | May 30, 2019 | Health & Wellness, Work From Home
The winter doldrums have left most of the country and we are witnessing the arrival of spring. Just like the budding trees and baby animals signify a new start, so does a fresh cleaning of your home. But don’t let the spring cleaning stop with the physical place where you live—extend it to all corners of your life. Give your life a good spring cleaning by organizing, decluttering, and setting goals.
ORGANIZE
By now everyone knows who Marie Kondo is—the master of “The Life-Changing Magic of Tidying Up.” What began a worldwide phenomenon of “sparking joy” in your home can be applied to your work life as well. Start by organizing your thoughts. Write down the tasks you want to accomplish whether it be daily, monthly, or yearly. Calendar the tasks so you know when you want them completed and prioritize them so you know what importance you assign to each item. Prioritizing tasks helps you accept a request or confidently say “no” when someone asks you to do something knowing it doesn’t fit in with your priorities. Organizing tasks works for both your personal and work life.
DECLUTTER
A good decluttering session is good for the soul! Step back and look at your workspace—are there piles of paper stacked on your desk? What about that mound of things you keep saying you’ll take upstairs in your house? Do you have relationships that are cluttering up your life? Take an hour each week to sort through your workspace piles. Choose to save only the papers/magazines/notes that you need to complete your job or that you want to save for sentimental reasons. Toss the rest of those papers in the recycle bin! After you are able to pare down the piles, begin asking yourself if the next paper that comes across your desk needs to be saved, trashed, or recycled so that those mounds don’t grow into mountains again. The same goes for stuff around your house. Start that garage sale box, begin a keepsake box, and trash the rest. Finally, kick those toxic relationships to the curb. You know the ones—the relationships that suck the life out of you. If you have someone whose values and priorities don’t align with yours, choose to keep them at arm’s length so you can spend more time with the people who hold priority in your life.
SET GOALS
Goals are unlike resolutions. Resolutions are a firm decision to do or not to do something. “I resolve not to eat dessert after every meal.” Goals give direction to follow to achieve a desired outcome. For instance, a career goal may be to finish your college degree or obtain a special certification. A relationship goal could be to have weekly date night or to start a family. Financial goals may include paying down debt, setting aside money from each check for a summer vacation, or to begin regularly giving to a non-profit dear to your heart. Set goals as you spring clean your life to give yourself direction in how you spend your time and effort this year.
As you begin spring cleaning your life, you will be surprised what good things are able to flow into those corners that were previously inhabited by disorganization, clutter, or lack of focus. By giving yourself a chance to have a fresh start in your life, you are encouraging new growth. And new growth is always exciting!
by admin | May 23, 2019 | Financial Planning
Preston Newby was a youth minister. He and his wife, Tara, were driving with their son to visit family—excited to announce a new baby on the way. In the keeping with the kind of person Preston was, he stopped to help at the scene of an accident. That’s when he was struck by another car and killed. He was only 24.
Fortunately, this young couple had done their planning and had bought life insurance. So despite the emotional upheaval that Preston’s death caused, Tara, a stay-at-home mom, and her two sons were able to carry on financially as they had before. You can watch their story here.
How many other people have prepared like this for the unexpected? Unfortunately, not enough: 43% of adult Americans don’t have life insurance, according to the 2019 Insurance Barometer Study, by Life Happens and LIMRA.
Many people think, “I’m young. That won’t happen to me.” Statistically they may be right. However, they could be up being one of the statistics. You just don’t know—and that’s the problem. The solution is life insurance.
If you have people you love and who depend on you, or you have financial obligations to meet, you need life insurance to protect against the “what ifs”—at every stage in life. Here are just a few reasons you may need life insurance, or more of it, throughout your life.
Single with no children: You may think you don’t need life insurance, since you have no dependents, but if you owe money, you need it. It ensures that your debts, including student loans and funeral expenses, won’t be passed on to your family. Additionally, if you are taking care of aging parents or a special-needs sibling, or know you will in the future, life insurance is a smart way to make sure that care can continue uninterrupted.
Married or partnered: As you begin your lives together, you’ll likely incur joint financial obligations like buying a home, in addition to monthly bills. It makes sense to protect your spouse or partner with adequate life insurance. It’s also a smart move to get coverage in place now if you plan on having a family in the future.
Parents with children: If you’re in the midst of this stage, financial obligations abound. Many couples rely on two incomes to make ends meet and single parents may be their children’s one-and-only. Life insurance is critical at this point. When figuring out how much you need, remember that the economic impact you have on your family can be measured not just by how much you earn now, but by how much you’ll earn over the course of your working life. Life Happens’ Human Life Value Calculator can help you figure out what that will be.
Empty-nesters/retirees: Your kids are on their own and your mortgage is paid off, so you may think you don’t need life insurance. However, if you are still building your retirement nest egg, life insurance ensures that if something happens to you that your spouse or partner can still live comfortably in retirement, despite any shortfalls.
Keep in mind, life insurance is a simple answer to an important question: Would anyone suffer financially if I were to die. If the answer is yes, it’s time to sit down with an insurance professional.
By Maggie Leyes
Originally posted on lifehappens.org
by admin | May 14, 2019 | Employee Benefits, Human Resources
While more and more perks — catered lunches, on-site gyms, immunizations programs — are about employee health, wellness, and happiness, they ultimately are also designed to keep workers at work. A recent article in Quartz at Work points out that more than anything, employees want more time off and out of the office. Unlimited time off, to be exact.
Once the perk of tech firms and startups, more companies are beginning to explore unlimited paid time off. And, though still rare at only one to two percent of companies, it’s a popular request in part because workforce demographics continue to shift. Nearly half of employees are Millennials, whose priorities are changing the benefits conversation. For this group, finding more balance and having more control of their time are key. In part, this may be because time off has fundamentally changed. Well and Good looks at the fact that, with near-constant connectedness, vacation days often still involve checking email and getting other notifications.
Add to that cultural and workplace expectations of accessibility and availability, and workers are at risk for burnout. One in four workers report feeling burned out all the time and almost half feel burned out sometimes. This burnout can cost employers in lost productivity, and employees in terms of health and happiness. Today, someone doesn’t need to psychically spend 90 hours a week at the office to be working 90 hours. With our always-on lives, restorative time off is rarer but still as important to prevent burnout.
That doesn’t mean every business is jumping on the unlimited time off bandwagon. Want other ideas? A writer for The Guardian suggests a middle ground, with more days off the longer an employee has worked at a company. And, while rollover sounds generous, it may make employees less likely to use it. Want to give it a try but concerned about misuse? Business Management Daily suggests it’s also more than reasonable to consider limits on unlimited and critical to set sound guidelines around pay as well as whether days off can be all in a row.
For many employees, unlimited time off offers the extra flexibility for life’s challenges and can aid satisfaction and retention. Before HR Departments worry the system will be abused, research shows that people take significantly less time off when it’s unlimited. In fact, what may be more impactful is a minimum number of days off may be required so as to ensure employees take advantage of a benefit meant to restore and replenish their energy, creativity, and engagement. To work, it needs to be modeled by managers and other higher-ups, as a CEO details in a Chicago Daily Herald article.
By Bill Olson
Originally posted on ubabenefits.com
