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The Complete Idiot's Guide® To Accounting by Lita Epstein, Shellie L. Moore

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Reviewing Taxable Benefits

Basically any benefit that the government does not specify in Publication 15-B, “Employer’s Tax Guide to Fringe Benefits” (www.irs.gov/pub/irs-pdf/p15b.pdf) as nontaxable should be considered taxable and included in the employee’s compensation. Some key benefits that must be included are personal use of a company auto, group life insurance over $50,000, third-party sick pay, and benefits that exceed the limits including transportation benefits, education benefits, dependent care benefits, and employee discounts. If you decide to pay your employee’s share of Social Security and Medicare taxes, you must include the amount you pay in the employee’s income.

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