ACCT 461 Notes

ACCT 461 Notes - Ch. 2 Employment Income + Salary +...

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Ch. 2 Employment Income + Salary + Commission Income + Taxable Benefits (paid by employer) - Allowable Deductions (paid by employee) = Net Employment Income
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A-1 AUTOMOBILE BENEFITS Standby Charge – Owned car 2% x Cost of Car x number of months Operating Cost Benefit Personal km x 24¢ If car is leased by employer, the standby charge 2/3 x monthly lease x number of months (exclude any insurance cost)
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A – 2 AUTOMOBILE BENEFITS Compute Employment use of Automobile - km for Employment = % Total km Driven If Employment use > 50% Operating Cost Benefit can be reduced to ½ Standby Charge (if lower)
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A – 3 If Employment use is > 50% Standby Charge is reduced Original Standby Charge x Personal km 1,667 x number of months
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Net Employment Income Problems Approach (1) Determine who is making the payment for the amount. Whether it is: Employer Employee
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(2) If it is Employer Payment Is it taxable or non-taxable? (3) If it is Employee making payment Is it an allowable deduction or non-deductible payment?
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S – 1 Salesperson’s Expenses - are allowed to claim all expenses considered necessary in performance of duties - must receive part of remuneration in form of commissions - Employer signs T2200 to authorize salesperson to deduct expenses - ordinarily required to carry out duties away from employer’s place of business
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S – 2 Salesperson’s Expenses - expenses, except for CCA on automobile, and interest expense on car loan, are limited to total amount of commission income - if employer reimburses employee for expenses, the reimbursement must be included in income
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SO – 1 Stock Option Benefits - Stock option is given to employee to purchase shares at a specific price.
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ACCT 461 Notes - Ch. 2 Employment Income + Salary +...

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