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Course Details

Employee Compensation and Benefits - Tax Mini Course (Course Id 825)

Updated / QAS / Registry / EA
  Add to Cart 
Author : Danny C Santucci, JD
Course Length : Pages: 29 ||| Review Questions: 20 ||| Final Exam Questions: 20
CPE Credits : 4.0
IRS Credits : 4
Price : $35.95
Passing Score : 70%
Course Type: NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents
Technical Designation: Technical
Primary Subject-Field Of Study:

Taxes - Taxes for Course Id 825

Description :

The various ideas, methods, and techniques to optimize the overall compensation package for key employees and principals are examined in this employee compensation and benefits mini-course. Generally, businesses may deduct employees’ pay including wages, salaries, and other perks. Certain fringe benefits that can provide an unusually tax-favored manner of supplementing compensation are described and evaluated. In addition, equity participation is explored through stock sales, repurchase agreements, incentive stock options, ESOTs, stock options, and bonuses. Finally, deferred compensation arrangements are investigated. The goal of this mini-course is to provide participants with a working knowledge of the types of compensation necessary to structure a compensation package minimizing tax liabilities and cost. 

Usage Rank : 20417
Release : 2024
Version : 1.0
Prerequisites : General understanding of federal income taxation.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 20-Mar-2024
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - 825

Keywords : Taxes, Employee, Compensation, Benefits, Tax, Mini, Course, cpe, cpa, online course
Learning Objectives :

As a result of studying the assigned materials, you should be able to meet the objectives listed below.

    At the start of the materials, participants should identify the following topics for study:
      * Wages, salary & pay
      * Tests for deducting pay to employees
      * Selected types of compensation
      * Payroll taxes
      * Selected fringe benefits
      * Interest-free & below-market loans
      * Equity participation
      * Advantages of nonqualified deferred compensation
      * Funded company account plans
Learning Objectives:
    After reading the materials, participants will be able to:
      1. Identify the common-law rules used by the IRS to determine whether a person is an employee for purposes of FICA, FUTA, and federal income tax withholding.
      2. Recognize employee and officer compensation deductibility factors and the related employment taxes and reporting obligations to ensure compliance with regulations.
      3. Identify fringe benefits specifying those that provide deductible incentive-based employee compensation.
      4. Specify the equity incentive opportunities available to employers showing the variety, tax treatment, and use of stock plans.
      5. Recognize the use of deferred compensation agreements to attain compensation and retirement objectives.
Course Contents :

Chapter 1 - Employee Compensation and Benefits


Wages, Salary & Pay

Employee vs. Contractor Status


Tests for Deducting Pay to Employees

Test #1 - Reasonableness

Overall Limitation

Allowance of Deduction

Publicly Traded Corporation Limitation

Limitation on Accrual Deduction

Employment Contracts

Scope of Examination

Officer’s Compensation


Employee’s Qualifications

Size of the Business

Employee’s Compensation History

Unreasonably Low Salaries

Past Service

Reasonable Dividends

Bonuses as Constituting Dividends

Payback Agreements

Miscellaneous Factors

Test #2 - For Services Performed

Employee-Shareholder Salaries

Selected Types of Compensation



Employee Gifts of Nominal Value

Education Expenses

Fringe Benefits

Life Insurance Coverage

Welfare Benefit Funds

Loans or Advances


Restricted Property

Sick & Vacation Pay

Payroll Tax Withholding & Reporting

Form 941

Deposit Rules

Lookback Period

Monthly Depositor

Semi-Weekly Depositor

One-Day Rule

Forms 940, 943, 944, and 945

Form W-4

Form W-2

Form W-3

Social Security’s Payroll Taxes or FICA - §3111 & §3121


FUTA - §3301 & 3306

Form 940

Selected Fringe Benefits

No-Additional-Cost Services - §132(b)

Covered Employees

Line of Business Requirement


Qualified Employee Discounts - §132(c)

Manner of Discount

Real Estate & Investment Property Exclusion

Amount of Discount

Working Condition Fringes - §132(d)

Covered Employees



De Minimis Fringes - §132(e)

Subsidized Eating Facilities


Employee Achievement Awards - §74(c) & §274(j)


Definition of Employee Achievement Awards

Qualified Plan Award

Employer Deduction Limits

Aggregation Limit

Special Partnership Rule

Employee Impact

Group Term Life Insurance - §79

Dependent Care Assistance - §129

Amount of Assistance


Conflict with Dependent Care

Cafeteria Plans - §125


Qualified Benefits

Non-Qualified Benefits

Controlled Group Rules

Salary Reduction Plans


Meals & Lodging - §119

Income Exclusion

Convenience of Employer

Self-Insured Medical Reimbursement Plans - §105

Allowable Expenses




Employee Educational Assistance Programs - §127

Employer-Provided Automobile - §61 & §132

General Valuation Method

Annual Lease Value Method


Cents per Mile Method

Commuting Value Method

Interest-Free & Below-Market Loans - §7872

Permissible Discrimination

Employee Needs

Imputed Interest

Types of Loans

Demand Loans

Term Loans

Application of §7872 and Rate Determinations


Moving Expense Reimbursement - §217

Family & Medical Leave - §45S

Qualified Transportation - §132(f)

Employer-Provided Retirement Advice & Planning - §132

Financial Planning - §67 & §212



Tax Planning - §67 & §212


Estate Planning - §67 & §212

On-premises Athletic Facility - §132(j)(4)(B)

ERISA Compliance

Welfare Plans

Additional Requirements

Equity Participation

Stock Transfers or Equity Grants

Stock Sales or Unrestricted Stock Plan

Stock Plans

Stock Bonus


Phantom Stock


Comparison with Profit-Sharing Plans

Repurchase or Restricted Stock Agreement

Stock Options

Section 83

Risk of Forfeiture


Stock Appreciation Rights Plans

Tandem Plans

Qualified Incentive Stock Option


Nonqualified Deferred Compensation

Postponement of Income


IRS Scrutiny & Approval




No Immediate Cash Outlay

Annual Report

Notice Requirement


Benefit Formula


Deferred Bonuses

Tax Status

Service’s Position


Constructive Receipt

Beyond Actual Receipt

Simple Set-Asides Are Not Possible

Revenue Ruling 60-31


Time & Control Concept



Economic Benefit

Has Something of Value Been Transferred?

Insurance Coverage Has a Calculable Value

Segregated Funds Have Immediate Economic Value

General Principles

Unfunded Bare Contractual Promise Plan - Type I


Funded Company Account Plan - Type II

Ownership & Segregation

Bookkeeping Reserve or Separate Account

Employee Bears Economic Risk

Limited Protection

Investment of Deferred Amounts

Life Insurance


Third Party Guarantees

Segregated Asset Plan - Type III

Section 83 Approach

Tight Rope Format

Transferable or Not Subject To A Risk of Substantial Forfeiture

Substantial Restrictions

Redemption or Forfeiture

Condition Related to a Purpose of the Transfer



Time Alone is not Enough

Realization & Taxation

30-Day Election Period

Deduction Allowed



Tax Consequences

Reciprocal Taxation/Deduction Rule

No Difference for Cash or Accrual

Separate Accounts for Two or More Participants

Income Tax on Employer Held Assets



Tax CPE Courses: https://www.cpethink.com/tax-cpa-courses
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