- Flexible employee benefit programs, which allow employees to custom design their own package of health and other benefits,
are becoming ever more popular in the workplace. Care should be taken when structuring such plans, however, because taxable benefits can result. If, for example, an employee accumulates flex credits and those benefits are received in cash, that amount is generally considered taxable income by Tax Accountant at Brampton.
Accountant Brampton
- Employees who are awarded near-cash merchandise such
as a gift certificate must take the fair market value of that award into
account as taxable income.
- If you receive more than two non-cash gifts or awards from your employer, select the two with an aggregate cost closest to $500 as your entitlement. For example, if you received four awards that
cost $300, $200, $150 and $100 respectively, select the first two awards (costing $500) as being non-taxable and declare the $250 cost of the remaining two in Brampton.
- An employee or ex-employee who receives periodic payments in Brampton under a disability insurance plan, sickness or accident insurance plan or income maintenance insurance plan to compensate for loss of income from an office or employment must include that amount in income if the plan’s premiums were paid for by the employer; however, they may deduct from income any amount they may have personally contributed toward such a plan according to Tax Accountant at Brampton.
- A lump sum payment (as opposed to a periodic payment) received from a lawsuit or other source to settle a dispute concerning disability or similar income compensation might be non-taxable
under some circumstances, Tax Accountant Brampton ON.
- Under some circumstances an employer provided computer in Brampton and Internet service might not represent a taxable benefit if employees require such a service to carry out their business obligations.
- If you receive an arbitration award from your employer for reasons such as a collective agreement breach to compensate for lost wages, or you receive retroactive payments as a result of a
decision such as pay equity, you should consult a tax accountant in brampton to determine the appropriate tax treatment for that payment. The rules can differ depending on the compensation received.
- Where there has been a reduction in the option price to an amount below the value of the underlying share when the option was granted, the taxpayer might still be able to claim the stock option deduction. It could still be available where an employee stock option plan provides participants the option of acquiring shares at their FMV when the option was granted – even if the plan is amended at a later date in Brampton ON.
For more information please call Karn, Tax Accountant at Brampton.