How well do you know what can be deducted? - quiz on the taxation of employee benefits - Managing Your Small Business - Brief Article

Nation's Business, August, 1996

Keeping up with changing benefits regulations is an everyday challenge. Is your company up to the task? Take this quiz from the American Management Association to test your knowledge in this area:

1. According to the Internal Revenue Service, which of the following are de minimis fringe benefits (those too insignificant to be dealt with judicially) and therefore are not taxable?

A. Season tickets to the theater or sporting events.

B. Free use of a company car to commute to work.

C. Use of an employer-owned hunting lodge for a weekend.

D. None of the above.

2. Which of the following is not a deductible business-meal expense?

A. Taxi fares to and from the restaurant.

B. The meal, if it costs more than $25.

C. The tip.

D. Parking fees.

3. A company is giving away door prizes at its holiday party. Which of the following gifts must be taxed under IRS regulations?

B. A $20 clock radio.

C. A $2 certificate for a dinner for

D. All of the above are fringe that are not taxed.

Answers

1. D

2. A

3. C