THE-WFT08-06-1001-ch_17_V4-SM

THE-WFT08-06-1001-ch_17_V4-SM - CHAPTER 17 INDIVIDUALS AS...

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CHAPTER 17 INDIVIDUALS AS EMPLOYEES AND PROPRIETORS SOLUTIONS TO PROBLEM MATERIALS Status: Q/P in Question/ Present Prior Problem Topic Edition Edition 1 Employer-employee relationship: key factors Unchanged 1 2 Health insurance, other fringe benefits Unchanged 2 3 Salary increase versus health insurance Unchanged 3 premiums 4 Long-term care insurance benefits Modified 4 5 Meals and lodging Unchanged 5 6 Meals and lodging, specific benefits Modified 6 7 Working condition fringe Unchanged 7 8 Flexible benefits plan New 9 Fringe benefits Modified 9 10 Fringe benefits: employee discounts Unchanged 10 11 Ethics problem Unchanged 11 12 Issue ID Unchanged 12 13 Fringe benefits versus taxable compensation Unchanged 13 14 Foreign earned income Unchanged 14 15 Commuting expense and transportation Modified 15 between work stations 16 Travel and pleasure combined Modified 16 17 Business convention Unchanged 17 18 Foreign travel: determining business/pleasure Unchanged 18 portions 19 Moving expenses Unchanged 19 20 Moving expenses Modified 20 21 Education expenses New 22 Qualified tuition and related expenses Unchanged 22 under § 222 23 Travel expenses Unchanged 23 24 Home office expenses New 25 Partially reimbursed expenses Unchanged 25 26 IRA/Simple IRA Unchanged 26 27 Traditional IRA versus Roth IRA Modified 27 28 Conversion of a traditional IRA into a Roth IRA Unchanged 28 17-1
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17-2 2008 Entities Volume/Solutions Manual Status: Q/P in Question/ Present Prior Problem Topic Edition Edition 29 Education IRA Unchanged 29 30 Keogh plan Modified 30 31 Keogh plan New 32 FICA withholding calculation Modified 32 33 Determination of self-employment tax Modified 33 34 Hobby/business New Comprehensive Tax Return Problem 35 Comprehensive Modified 35 36 Comprehensive New Bridge Discipline Problem 1 Self-employment tax versus FICA withholding Unchanged 1 calculation 2 Defined contribution plan contributions and Unchanged 2 vesting 3 Justification for certain tax provisions Unchanged 3 Research Problem 1 Moving expenses Unchanged 1 2 Business gifts Unchanged 2 3 Temporary assignment versus change Unchanged 3 in tax home 4 De minimis fringe benefit Unchanged 4 5 Retirement incentives Unchanged 5 6 Internet activity Unchanged 6 7 Internet activity Unchanged 7
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Individuals as Employees and Proprietors 17-3 PROBLEMS 1. a. Self-employed classification. Employee status is reflected if payment is based on time spent. b. Employee classification. c. Self-employed classification. d. Employee classification. pp. 17-2 and 17-4 2. Rex is required to include in gross income the $4,500 received from the wage continuation policy (c.) while he was ill. This amount is included in gross income only because the employer paid for the policy. The other items can be excluded from gross income. pp. 17-6, 17-7, and 17- 11 3. For Paul the salary increase would raise his after-tax income by $5,950 [(1 –.15)($7,000)], while the nontaxable insurance protection would raise his after-tax and after insurance income by
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THE-WFT08-06-1001-ch_17_V4-SM - CHAPTER 17 INDIVIDUALS AS...

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