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2011 1040 Ez Tax Forms

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2011 1040 Ez Tax Forms

2011 1040 ez tax forms 8. 2011 1040 ez tax forms   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. 2011 1040 ez tax forms Reporting tax withheld. 2011 1040 ez tax forms Nominees. 2011 1040 ez tax forms Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. 2011 1040 ez tax forms Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. 2011 1040 ez tax forms Alternative minimum tax treatment. 2011 1040 ez tax forms How To Report Dividend IncomeInvestment interest deducted. 2011 1040 ez tax forms Reminder Foreign-source income. 2011 1040 ez tax forms  If you are a U. 2011 1040 ez tax forms S. 2011 1040 ez tax forms citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. 2011 1040 ez tax forms S. 2011 1040 ez tax forms law. 2011 1040 ez tax forms This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. 2011 1040 ez tax forms Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. 2011 1040 ez tax forms This chapter also explains how to report dividend income on your tax return. 2011 1040 ez tax forms Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. 2011 1040 ez tax forms You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. 2011 1040 ez tax forms However, some amounts you receive that are called dividends are actually interest income. 2011 1040 ez tax forms (See Dividends that are actually interest under Taxable Interest in chapter 7. 2011 1040 ez tax forms ) Most distributions are paid in cash (or check). 2011 1040 ez tax forms However, distributions can consist of more stock, stock rights, other property, or services. 2011 1040 ez tax forms Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. 2011 1040 ez tax forms Tax on unearned income of certain children. 2011 1040 ez tax forms   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. 2011 1040 ez tax forms If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. 2011 1040 ez tax forms If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. 2011 1040 ez tax forms    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. 2011 1040 ez tax forms Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. 2011 1040 ez tax forms   For more information about the tax on unearned income of children and the parents' election, see chapter 31. 2011 1040 ez tax forms Beneficiary of an estate or trust. 2011 1040 ez tax forms    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. 2011 1040 ez tax forms You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. 2011 1040 ez tax forms , from the fiduciary. 2011 1040 ez tax forms Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. 2011 1040 ez tax forms Social security number (SSN) or individual taxpayer identification number (ITIN). 2011 1040 ez tax forms    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. 2011 1040 ez tax forms This includes payers of dividends. 2011 1040 ez tax forms If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. 2011 1040 ez tax forms For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. 2011 1040 ez tax forms Backup withholding. 2011 1040 ez tax forms   Your dividend income is generally not subject to regular withholding. 2011 1040 ez tax forms However, it may be subject to backup withholding to ensure that income tax is collected on the income. 2011 1040 ez tax forms Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. 2011 1040 ez tax forms   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. 2011 1040 ez tax forms For more information, see Backup Withholding in chapter 4. 2011 1040 ez tax forms Stock certificate in two or more names. 2011 1040 ez tax forms   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. 2011 1040 ez tax forms Form 1099-DIV. 2011 1040 ez tax forms   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. 2011 1040 ez tax forms Keep this form with your records. 2011 1040 ez tax forms You do not have to attach it to your tax return. 2011 1040 ez tax forms Dividends not reported on Form 1099-DIV. 2011 1040 ez tax forms   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. 2011 1040 ez tax forms For example, you may receive distributive shares of dividends from partnerships or S corporations. 2011 1040 ez tax forms These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. 2011 1040 ez tax forms , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. 2011 1040 ez tax forms Reporting tax withheld. 2011 1040 ez tax forms   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. 2011 1040 ez tax forms Nominees. 2011 1040 ez tax forms   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. 2011 1040 ez tax forms Form 1099-MISC. 2011 1040 ez tax forms   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. 2011 1040 ez tax forms See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. 2011 1040 ez tax forms Incorrect amount shown on a Form 1099. 2011 1040 ez tax forms   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. 2011 1040 ez tax forms The new Form 1099 you receive will be marked “Corrected. 2011 1040 ez tax forms ” Dividends on stock sold. 2011 1040 ez tax forms   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. 2011 1040 ez tax forms Dividends received in January. 2011 1040 ez tax forms   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. 2011 1040 ez tax forms You report the dividend in the year it was declared. 2011 1040 ez tax forms Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. 2011 1040 ez tax forms They are paid out of earnings and profits and are ordinary income to you. 2011 1040 ez tax forms This means they are not capital gains. 2011 1040 ez tax forms You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. 2011 1040 ez tax forms Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. 2011 1040 ez tax forms Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. 2011 1040 ez tax forms They should be shown in box 1b of the Form 1099-DIV you receive. 2011 1040 ez tax forms The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. 2011 1040 ez tax forms 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. 2011 1040 ez tax forms 6%. 2011 1040 ez tax forms 20% on any amount that otherwise would be taxed at a 39. 2011 1040 ez tax forms 6% rate. 2011 1040 ez tax forms To qualify for the maximum rate, all of the following requirements must be met. 2011 1040 ez tax forms The dividends must have been paid by a U. 2011 1040 ez tax forms S. 2011 1040 ez tax forms corporation or a qualified foreign corporation. 2011 1040 ez tax forms (See Qualified foreign corporation , later. 2011 1040 ez tax forms ) The dividends are not of the type listed later under Dividends that are not qualified dividends . 2011 1040 ez tax forms You meet the holding period (discussed next). 2011 1040 ez tax forms Holding period. 2011 1040 ez tax forms   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. 2011 1040 ez tax forms The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. 2011 1040 ez tax forms Instead, the seller will get the dividend. 2011 1040 ez tax forms   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. 2011 1040 ez tax forms See the examples later. 2011 1040 ez tax forms Exception for preferred stock. 2011 1040 ez tax forms   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. 2011 1040 ez tax forms If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. 2011 1040 ez tax forms Example 1. 2011 1040 ez tax forms You bought 5,000 shares of XYZ Corp. 2011 1040 ez tax forms common stock on July 9, 2013. 2011 1040 ez tax forms XYZ Corp. 2011 1040 ez tax forms paid a cash dividend of 10 cents per share. 2011 1040 ez tax forms The ex-dividend date was July 16, 2013. 2011 1040 ez tax forms Your Form 1099-DIV from XYZ Corp. 2011 1040 ez tax forms shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). 2011 1040 ez tax forms However, you sold the 5,000 shares on August 12, 2013. 2011 1040 ez tax forms You held your shares of XYZ Corp. 2011 1040 ez tax forms for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). 2011 1040 ez tax forms The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. 2011 1040 ez tax forms You have no qualified dividends from XYZ Corp. 2011 1040 ez tax forms because you held the XYZ stock for less than 61 days. 2011 1040 ez tax forms Example 2. 2011 1040 ez tax forms Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. 2011 1040 ez tax forms You held the stock for 63 days (from July 16, 2013, through September 16, 2013). 2011 1040 ez tax forms The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). 2011 1040 ez tax forms Example 3. 2011 1040 ez tax forms You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. 2011 1040 ez tax forms ABC Mutual Fund paid a cash dividend of 10 cents a share. 2011 1040 ez tax forms The ex-dividend date was July 16, 2013. 2011 1040 ez tax forms The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. 2011 1040 ez tax forms Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. 2011 1040 ez tax forms However, you sold the 10,000 shares on August 12, 2013. 2011 1040 ez tax forms You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. 2011 1040 ez tax forms Holding period reduced where risk of loss is diminished. 2011 1040 ez tax forms   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. 2011 1040 ez tax forms You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. 2011 1040 ez tax forms You were grantor (writer) of an option to buy substantially identical stock or securities. 2011 1040 ez tax forms Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. 2011 1040 ez tax forms   For information about how to apply condition (3), see Regulations section 1. 2011 1040 ez tax forms 246-5. 2011 1040 ez tax forms Qualified foreign corporation. 2011 1040 ez tax forms   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. 2011 1040 ez tax forms The corporation is incorporated in a U. 2011 1040 ez tax forms S. 2011 1040 ez tax forms possession. 2011 1040 ez tax forms The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. 2011 1040 ez tax forms For a list of those treaties, see Table 8-1. 2011 1040 ez tax forms The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. 2011 1040 ez tax forms See Readily tradable stock , later. 2011 1040 ez tax forms Exception. 2011 1040 ez tax forms   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. 2011 1040 ez tax forms Readily tradable stock. 2011 1040 ez tax forms   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. 2011 1040 ez tax forms For a list of the exchanges that meet these requirements, see www. 2011 1040 ez tax forms sec. 2011 1040 ez tax forms gov/divisions/marketreg/mrexchanges. 2011 1040 ez tax forms shtml. 2011 1040 ez tax forms Dividends that are not qualified dividends. 2011 1040 ez tax forms   The following dividends are not qualified dividends. 2011 1040 ez tax forms They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. 2011 1040 ez tax forms Capital gain distributions. 2011 1040 ez tax forms Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. 2011 1040 ez tax forms S. 2011 1040 ez tax forms building and loan associations, U. 2011 1040 ez tax forms S. 2011 1040 ez tax forms savings and loan associations, federal savings and loan associations, and similar financial institutions. 2011 1040 ez tax forms (Report these amounts as interest income. 2011 1040 ez tax forms ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. 2011 1040 ez tax forms Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. 2011 1040 ez tax forms Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. 2011 1040 ez tax forms Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. 2011 1040 ez tax forms Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. 2011 1040 ez tax forms Table 8-1. 2011 1040 ez tax forms Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. 2011 1040 ez tax forms Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. 2011 1040 ez tax forms This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. 2011 1040 ez tax forms Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. 2011 1040 ez tax forms If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. 2011 1040 ez tax forms If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. 2011 1040 ez tax forms You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. 2011 1040 ez tax forms But you may be able to deduct the service charge. 2011 1040 ez tax forms See chapter 28 for more information about deducting expenses of producing income. 2011 1040 ez tax forms In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. 2011 1040 ez tax forms If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. 2011 1040 ez tax forms When figuring this amount, use the fair market value of the stock on the dividend payment date. 2011 1040 ez tax forms Money Market Funds Report amounts you receive from money market funds as dividend income. 2011 1040 ez tax forms Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. 2011 1040 ez tax forms Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). 2011 1040 ez tax forms They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. 2011 1040 ez tax forms Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. 2011 1040 ez tax forms Undistributed capital gains of mutual funds and REITs. 2011 1040 ez tax forms    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. 2011 1040 ez tax forms You must treat your share of these gains as distributions, even though you did not actually receive them. 2011 1040 ez tax forms However, they are not included on Form 1099-DIV. 2011 1040 ez tax forms Instead, they are reported to you in box 1a of Form 2439. 2011 1040 ez tax forms   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. 2011 1040 ez tax forms   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. 2011 1040 ez tax forms You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. 2011 1040 ez tax forms Attach Copy B of Form 2439 to your return, and keep Copy C for your records. 2011 1040 ez tax forms Basis adjustment. 2011 1040 ez tax forms   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. 2011 1040 ez tax forms Additional information. 2011 1040 ez tax forms   For more information on the treatment of distributions from mutual funds, see Publication 550. 2011 1040 ez tax forms Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. 2011 1040 ez tax forms You should receive a Form 1099-DIV or other statement showing the nondividend distribution. 2011 1040 ez tax forms On Form 1099-DIV, a nondividend distribution will be shown in box 3. 2011 1040 ez tax forms If you do not receive such a statement, you report the distribution as an ordinary dividend. 2011 1040 ez tax forms Basis adjustment. 2011 1040 ez tax forms   A nondividend distribution reduces the basis of your stock. 2011 1040 ez tax forms It is not taxed until your basis in the stock is fully recovered. 2011 1040 ez tax forms This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. 2011 1040 ez tax forms If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. 2011 1040 ez tax forms   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. 2011 1040 ez tax forms Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. 2011 1040 ez tax forms See Holding Period in chapter 14. 2011 1040 ez tax forms Example. 2011 1040 ez tax forms You bought stock in 2000 for $100. 2011 1040 ez tax forms In 2003, you received a nondividend distribution of $80. 2011 1040 ez tax forms You did not include this amount in your income, but you reduced the basis of your stock to $20. 2011 1040 ez tax forms You received a nondividend distribution of $30 in 2013. 2011 1040 ez tax forms The first $20 of this amount reduced your basis to zero. 2011 1040 ez tax forms You report the other $10 as a long-term capital gain for 2013. 2011 1040 ez tax forms You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. 2011 1040 ez tax forms Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. 2011 1040 ez tax forms These distributions are, at least in part, one form of a return of capital. 2011 1040 ez tax forms They may be paid in one or more installments. 2011 1040 ez tax forms You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. 2011 1040 ez tax forms For more information on liquidating distributions, see chapter 1 of Publication 550. 2011 1040 ez tax forms Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. 2011 1040 ez tax forms Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. 2011 1040 ez tax forms Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. 2011 1040 ez tax forms Taxable stock dividends and stock rights. 2011 1040 ez tax forms   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. 2011 1040 ez tax forms You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. 2011 1040 ez tax forms The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. 2011 1040 ez tax forms The distribution is in convertible preferred stock and has the same result as in (2). 2011 1040 ez tax forms The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. 2011 1040 ez tax forms The distribution is on preferred stock. 2011 1040 ez tax forms (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. 2011 1040 ez tax forms )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. 2011 1040 ez tax forms If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. 2011 1040 ez tax forms Preferred stock redeemable at a premium. 2011 1040 ez tax forms   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. 2011 1040 ez tax forms For more information, see chapter 1 of Publication 550. 2011 1040 ez tax forms Basis. 2011 1040 ez tax forms   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. 2011 1040 ez tax forms If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. 2011 1040 ez tax forms Fractional shares. 2011 1040 ez tax forms    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. 2011 1040 ez tax forms However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. 2011 1040 ez tax forms Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. 2011 1040 ez tax forms Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. 2011 1040 ez tax forms Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. 2011 1040 ez tax forms    Report these transactions on Form 8949 with the correct box checked. 2011 1040 ez tax forms   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. 2011 1040 ez tax forms Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). 2011 1040 ez tax forms Example. 2011 1040 ez tax forms You own one share of common stock that you bought on January 3, 2004, for $100. 2011 1040 ez tax forms The corporation declared a common stock dividend of 5% on June 29, 2013. 2011 1040 ez tax forms The fair market value of the stock at the time the stock dividend was declared was $200. 2011 1040 ez tax forms You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. 2011 1040 ez tax forms You figure your gain or loss as follows: Fair market value of old stock $200. 2011 1040 ez tax forms 00 Fair market value of stock dividend (cash received) +10. 2011 1040 ez tax forms 00 Fair market value of old stock and stock dividend $210. 2011 1040 ez tax forms 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. 2011 1040 ez tax forms 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. 2011 1040 ez tax forms 76 Total $100. 2011 1040 ez tax forms 00 Cash received $10. 2011 1040 ez tax forms 00 Basis (cost) of stock dividend − 4. 2011 1040 ez tax forms 76 Gain $5. 2011 1040 ez tax forms 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. 2011 1040 ez tax forms Scrip dividends. 2011 1040 ez tax forms   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. 2011 1040 ez tax forms The certificate is generally nontaxable when you receive it. 2011 1040 ez tax forms If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. 2011 1040 ez tax forms   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. 2011 1040 ez tax forms You must include its fair market value in income on the date you receive it. 2011 1040 ez tax forms Other Distributions You may receive any of the following distributions during the year. 2011 1040 ez tax forms Exempt-interest dividends. 2011 1040 ez tax forms   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. 2011 1040 ez tax forms Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. 2011 1040 ez tax forms Information reporting requirement. 2011 1040 ez tax forms   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. 2011 1040 ez tax forms This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. 2011 1040 ez tax forms Alternative minimum tax treatment. 2011 1040 ez tax forms   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. 2011 1040 ez tax forms See Alternative Minimum Tax (AMT) in chapter 30 for more information. 2011 1040 ez tax forms Dividends on insurance policies. 2011 1040 ez tax forms    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. 2011 1040 ez tax forms However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. 2011 1040 ez tax forms    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. 2011 1040 ez tax forms Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. 2011 1040 ez tax forms Report any taxable distributions on insurance policies on Form 1040, line 21. 2011 1040 ez tax forms Dividends on veterans' insurance. 2011 1040 ez tax forms   Dividends you receive on veterans' insurance policies are not taxable. 2011 1040 ez tax forms In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. 2011 1040 ez tax forms Patronage dividends. 2011 1040 ez tax forms   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. 2011 1040 ez tax forms   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. 2011 1040 ez tax forms But you must reduce the basis (cost) of the items bought. 2011 1040 ez tax forms If the dividend is more than the adjusted basis of the assets, you must report the excess as income. 2011 1040 ez tax forms   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. 2011 1040 ez tax forms Alaska Permanent Fund dividends. 2011 1040 ez tax forms    Do not report these amounts as dividends. 2011 1040 ez tax forms Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. 2011 1040 ez tax forms How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. 2011 1040 ez tax forms Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. 2011 1040 ez tax forms Report qualified dividends on line 9b of Form 1040 or Form 1040A. 2011 1040 ez tax forms If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. 2011 1040 ez tax forms See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. 2011 1040 ez tax forms If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. 2011 1040 ez tax forms You cannot use Form 1040EZ if you receive any dividend income. 2011 1040 ez tax forms Form 1099-DIV. 2011 1040 ez tax forms   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. 2011 1040 ez tax forms Even if you do not receive Form 1099-DIV, you must report all your dividend income. 2011 1040 ez tax forms   See Form 1099-DIV for more information on how to report dividend income. 2011 1040 ez tax forms Form 1040A or 1040. 2011 1040 ez tax forms    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. 2011 1040 ez tax forms If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. 2011 1040 ez tax forms   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. 2011 1040 ez tax forms If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. 2011 1040 ez tax forms If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. 2011 1040 ez tax forms   Enter on line 6 the total of the amounts listed on line 5. 2011 1040 ez tax forms Also enter this total on line 9a of Form 1040A or 1040. 2011 1040 ez tax forms Qualified dividends. 2011 1040 ez tax forms   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. 2011 1040 ez tax forms The amount in box 1b is already included in box 1a. 2011 1040 ez tax forms Do not add the amount in box 1b to, or substract it from, the amount in box 1a. 2011 1040 ez tax forms   Do not include any of the following on line 9b. 2011 1040 ez tax forms Qualified dividends you received as a nominee. 2011 1040 ez tax forms See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. 2011 1040 ez tax forms Dividends on stock for which you did not meet the holding period. 2011 1040 ez tax forms See Holding period , earlier under Qualified Dividends. 2011 1040 ez tax forms Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. 2011 1040 ez tax forms Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. 2011 1040 ez tax forms Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. 2011 1040 ez tax forms   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. 2011 1040 ez tax forms Enter qualified dividends on line 2 of the worksheet. 2011 1040 ez tax forms Investment interest deducted. 2011 1040 ez tax forms   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. 2011 1040 ez tax forms Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. 2011 1040 ez tax forms This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. 2011 1040 ez tax forms For more information about the limit on investment interest, see Investment expenses in chapter 23. 2011 1040 ez tax forms Expenses related to dividend income. 2011 1040 ez tax forms   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). 2011 1040 ez tax forms See chapter 28 for general information about deducting expenses of producing income. 2011 1040 ez tax forms More information. 2011 1040 ez tax forms    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. 2011 1040 ez tax forms Prev  Up  Next   Home   More Online Publications
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The 2011 1040 Ez Tax Forms

2011 1040 ez tax forms Publication 15-B - Main Content Table of Contents 1. 2011 1040 ez tax forms Fringe Benefit OverviewAre Fringe Benefits Taxable? Cafeteria Plans Simple Cafeteria Plans 2. 2011 1040 ez tax forms Fringe Benefit Exclusion RulesAccident and Health Benefits Achievement Awards Adoption Assistance Athletic Facilities De Minimis (Minimal) Benefits Dependent Care Assistance Educational Assistance Employee Discounts Employee Stock Options Employer-Provided Cell Phones Group-Term Life Insurance Coverage Health Savings Accounts Lodging on Your Business Premises Meals Moving Expense Reimbursements No-Additional-Cost Services Retirement Planning Services Transportation (Commuting) Benefits Tuition Reduction Working Condition Benefits 3. 2011 1040 ez tax forms Fringe Benefit Valuation RulesGeneral Valuation Rule Cents-Per-Mile Rule Commuting Rule Lease Value Rule Unsafe Conditions Commuting Rule 4. 2011 1040 ez tax forms Rules for Withholding, Depositing, and ReportingTransfer of property. 2011 1040 ez tax forms Amount of deposit. 2011 1040 ez tax forms Limitation. 2011 1040 ez tax forms Conformity rules. 2011 1040 ez tax forms Election not to withhold income tax. 2011 1040 ez tax forms How To Get Tax Help 1. 2011 1040 ez tax forms Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. 2011 1040 ez tax forms For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. 2011 1040 ez tax forms Performance of services. 2011 1040 ez tax forms   A person who performs services for you does not have to be your employee. 2011 1040 ez tax forms A person may perform services for you as an independent contractor, partner, or director. 2011 1040 ez tax forms Also, for fringe benefit purposes, treat a person who agrees not to perform services (such as under a covenant not to compete) as performing services. 2011 1040 ez tax forms Provider of benefit. 2011 1040 ez tax forms   You are the provider of a fringe benefit if it is provided for services performed for you. 2011 1040 ez tax forms You are considered the provider of a fringe benefit even if a third party, such as your client or customer, provides the benefit to your employee for services the employee performs for you. 2011 1040 ez tax forms For example, if, in exchange for goods or services, your customer provides day care services as a fringe benefit to your employees for services they provide for you as their employer, then you are the provider of this fringe benefit even though the customer is actually providing the day care. 2011 1040 ez tax forms Recipient of benefit. 2011 1040 ez tax forms   The person who performs services for you is considered the recipient of a fringe benefit provided for those services. 2011 1040 ez tax forms That person may be considered the recipient even if the benefit is provided to someone who did not perform services for you. 2011 1040 ez tax forms For example, your employee may be the recipient of a fringe benefit you provide to a member of the employee's family. 2011 1040 ez tax forms Are Fringe Benefits Taxable? Any fringe benefit you provide is taxable and must be included in the recipient's pay unless the law specifically excludes it. 2011 1040 ez tax forms Section 2 discusses the exclusions that apply to certain fringe benefits. 2011 1040 ez tax forms Any benefit not excluded under the rules discussed in section 2 is taxable. 2011 1040 ez tax forms Including taxable benefits in pay. 2011 1040 ez tax forms   You must include in a recipient's pay the amount by which the value of a fringe benefit is more than the sum of the following amounts. 2011 1040 ez tax forms Any amount the law excludes from pay. 2011 1040 ez tax forms Any amount the recipient paid for the benefit. 2011 1040 ez tax forms The rules used to determine the value of a fringe benefit are discussed in section 3. 2011 1040 ez tax forms   If the recipient of a taxable fringe benefit is your employee, the benefit is subject to employment taxes and must be reported on Form W-2, Wage and Tax Statement. 2011 1040 ez tax forms However, you can use special rules to withhold, deposit, and report the employment taxes. 2011 1040 ez tax forms These rules are discussed in section 4. 2011 1040 ez tax forms   If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes. 2011 1040 ez tax forms However, you may have to report the benefit on one of the following information returns. 2011 1040 ez tax forms If the recipient receives the benefit as: Use: An independent contractor Form 1099-MISC, Miscellaneous Income A partner Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. 2011 1040 ez tax forms For more information, see the instructions for the forms listed above. 2011 1040 ez tax forms Cafeteria Plans A cafeteria plan, including a flexible spending arrangement, is a written plan that allows your employees to choose between receiving cash or taxable benefits instead of certain qualified benefits for which the law provides an exclusion from wages. 2011 1040 ez tax forms If an employee chooses to receive a qualified benefit under the plan, the fact that the employee could have received cash or a taxable benefit instead will not make the qualified benefit taxable. 2011 1040 ez tax forms Generally, a cafeteria plan does not include any plan that offers a benefit that defers pay. 2011 1040 ez tax forms However, a cafeteria plan can include a qualified 401(k) plan as a benefit. 2011 1040 ez tax forms Also, certain life insurance plans maintained by educational institutions can be offered as a benefit even though they defer pay. 2011 1040 ez tax forms Qualified benefits. 2011 1040 ez tax forms   A cafeteria plan can include the following benefits discussed in section 2. 2011 1040 ez tax forms Accident and health benefits (but not Archer medical savings accounts (Archer MSAs) or long-term care insurance). 2011 1040 ez tax forms Adoption assistance. 2011 1040 ez tax forms Dependent care assistance. 2011 1040 ez tax forms Group-term life insurance coverage (including costs that cannot be excluded from wages). 2011 1040 ez tax forms Health savings accounts (HSAs). 2011 1040 ez tax forms Distributions from an HSA may be used to pay eligible long-term care insurance premiums or qualified long-term care services. 2011 1040 ez tax forms Benefits not allowed. 2011 1040 ez tax forms   A cafeteria plan cannot include the following benefits discussed in section 2. 2011 1040 ez tax forms Archer MSAs. 2011 1040 ez tax forms See Accident and Health Benefits in section 2. 2011 1040 ez tax forms Athletic facilities. 2011 1040 ez tax forms De minimis (minimal) benefits. 2011 1040 ez tax forms Educational assistance. 2011 1040 ez tax forms Employee discounts. 2011 1040 ez tax forms Employer-provided cell phones. 2011 1040 ez tax forms Lodging on your business premises. 2011 1040 ez tax forms Meals. 2011 1040 ez tax forms Moving expense reimbursements. 2011 1040 ez tax forms No-additional-cost services. 2011 1040 ez tax forms Transportation (commuting) benefits. 2011 1040 ez tax forms Tuition reduction. 2011 1040 ez tax forms Working condition benefits. 2011 1040 ez tax forms It also cannot include scholarships or fellowships (discussed in Publication 970, Tax Benefits for Education). 2011 1040 ez tax forms $2,500 limit on a health flexible spending arrangement (FSA). 2011 1040 ez tax forms   For plan years beginning after December 31, 2012, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,500. 2011 1040 ez tax forms For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. 2011 1040 ez tax forms   A cafeteria plan offering a health FSA must be amended to specify the $2,500 limit (or any lower limit set by the employer). 2011 1040 ez tax forms While cafeteria plans generally must be amended on a prospective basis, an amendment that is adopted on or before December 31, 2014, may be made effective retroactively, provided that in operation the cafeteria plan meets the limit for plan years beginning after December 31, 2012. 2011 1040 ez tax forms A cafeteria plan that does not limit health FSA contributions to the dollar limit is not a cafeteria plan and all benefits offered under the plan are includible in the employee's gross income. 2011 1040 ez tax forms   For more information, see Notice 2012-40, 2012-26 I. 2011 1040 ez tax forms R. 2011 1040 ez tax forms B. 2011 1040 ez tax forms 1046, available at www. 2011 1040 ez tax forms irs. 2011 1040 ez tax forms gov/irb/2012-26_IRB/ar09. 2011 1040 ez tax forms html. 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For these plans, treat the following individuals as employees. 2011 1040 ez tax forms A current common-law employee. 2011 1040 ez tax forms See section 2 in Publication 15 (Circular E) for more information. 2011 1040 ez tax forms A full-time life insurance agent who is a current statutory employee. 2011 1040 ez tax forms A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2011 1040 ez tax forms Exception for S corporation shareholders. 2011 1040 ez tax forms   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. 2011 1040 ez tax forms A 2% shareholder for this purpose is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2011 1040 ez tax forms Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2011 1040 ez tax forms Plans that favor highly compensated employees. 2011 1040 ez tax forms   If your plan favors highly compensated employees as to eligibility to participate, contributions, or benefits, you must include in their wages the value of taxable benefits they could have selected. 2011 1040 ez tax forms A plan you maintain under a collective bargaining agreement does not favor highly compensated employees. 2011 1040 ez tax forms   A highly compensated employee for this purpose is any of the following employees. 2011 1040 ez tax forms An officer. 2011 1040 ez tax forms A shareholder who owns more than 5% of the voting power or value of all classes of the employer's stock. 2011 1040 ez tax forms An employee who is highly compensated based on the facts and circumstances. 2011 1040 ez tax forms A spouse or dependent of a person described in (1), (2), or (3). 2011 1040 ez tax forms Plans that favor key employees. 2011 1040 ez tax forms   If your plan favors key employees, you must include in their wages the value of taxable benefits they could have selected. 2011 1040 ez tax forms A plan favors key employees if more than 25% of the total of the nontaxable benefits you provide for all employees under the plan go to key employees. 2011 1040 ez tax forms However, a plan you maintain under a collective bargaining agreement does not favor key employees. 2011 1040 ez tax forms   A key employee during 2014 is generally an employee who is either of the following. 2011 1040 ez tax forms An officer having annual pay of more than $170,000. 2011 1040 ez tax forms An employee who for 2014 is either of the following. 2011 1040 ez tax forms A 5% owner of your business. 2011 1040 ez tax forms A 1% owner of your business whose annual pay was more than $150,000. 2011 1040 ez tax forms Simple Cafeteria Plans Eligible employers meeting contribution requirements and eligibility and participation requirements can establish a simple cafeteria plan. 2011 1040 ez tax forms Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan. 2011 1040 ez tax forms Eligible employer. 2011 1040 ez tax forms   You are an eligible employer if you employ an average of 100 or fewer employees during either of the 2 preceding years. 2011 1040 ez tax forms If your business was not in existence throughout the preceding year, you are eligible if you reasonably expect to employ an average of 100 or fewer employees in the current year. 2011 1040 ez tax forms If you establish a simple cafeteria plan in a year that you employ an average of 100 or fewer employees, you are considered an eligible employer for any subsequent year as long as you do not employ an average of 200 or more employees in a subsequent year. 2011 1040 ez tax forms Eligibility and participation requirements. 2011 1040 ez tax forms   These requirements are met if all employees who had at least 1,000 hours of service for the preceding plan year are eligible to participate and each employee eligible to participate in the plan may elect any benefit available under the plan. 2011 1040 ez tax forms You may elect to exclude from the plan employees who: Are under age 21 before the close of the plan year, Have less than 1 year of service with you as of any day during the plan year, Are covered under a collective bargaining agreement, or Are nonresident aliens working outside the United States whose income did not come from a U. 2011 1040 ez tax forms S. 2011 1040 ez tax forms source. 2011 1040 ez tax forms Contribution requirements. 2011 1040 ez tax forms   You must make a contribution to provide qualified benefits on behalf of each qualified employee in an amount equal to: A uniform percentage (not less than 2%) of the employee’s compensation for the plan year, or An amount which is at least 6% of the employee’s compensation for the plan year or twice the amount of the salary reduction contributions of each qualified employee, whichever is less. 2011 1040 ez tax forms If the contribution requirements are met using option (2), the rate of contribution to any salary reduction contribution of a highly compensated or key employee can not be greater than the rate of contribution to any other employee. 2011 1040 ez tax forms More information. 2011 1040 ez tax forms   For more information about cafeteria plans, see section 125 of the Internal Revenue Code and its regulations. 2011 1040 ez tax forms 2. 2011 1040 ez tax forms Fringe Benefit Exclusion Rules This section discusses the exclusion rules that apply to fringe benefits. 2011 1040 ez tax forms These rules exclude all or part of the value of certain benefits from the recipient's pay. 2011 1040 ez tax forms The excluded benefits are not subject to federal income tax withholding. 2011 1040 ez tax forms Also, in most cases, they are not subject to social security, Medicare, or federal unemployment (FUTA) tax and are not reported on Form W-2. 2011 1040 ez tax forms This section discusses the exclusion rules for the following fringe benefits. 2011 1040 ez tax forms Accident and health benefits. 2011 1040 ez tax forms Achievement awards. 2011 1040 ez tax forms Adoption assistance. 2011 1040 ez tax forms Athletic facilities. 2011 1040 ez tax forms De minimis (minimal) benefits. 2011 1040 ez tax forms Dependent care assistance. 2011 1040 ez tax forms Educational assistance. 2011 1040 ez tax forms Employee discounts. 2011 1040 ez tax forms Employee stock options. 2011 1040 ez tax forms Employer-provided cell phones. 2011 1040 ez tax forms Group-term life insurance coverage. 2011 1040 ez tax forms Health savings accounts (HSAs). 2011 1040 ez tax forms Lodging on your business premises. 2011 1040 ez tax forms Meals. 2011 1040 ez tax forms Moving expense reimbursements. 2011 1040 ez tax forms No-additional-cost services. 2011 1040 ez tax forms Retirement planning services. 2011 1040 ez tax forms Transportation (commuting) benefits. 2011 1040 ez tax forms Tuition reduction. 2011 1040 ez tax forms Working condition benefits. 2011 1040 ez tax forms See Table 2-1, later, for an overview of the employment tax treatment of these benefits. 2011 1040 ez tax forms Table 2-1. 2011 1040 ez tax forms Special Rules for Various Types of Fringe Benefits (For more information, see the full discussion in this section. 2011 1040 ez tax forms ) Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare (including Additional Medicare Tax when wages are paid in excess of $200,000) Federal Unemployment (FUTA) Accident and health benefits Exempt1,2, except for long-term care benefits provided through a flexible spending or similar arrangement. 2011 1040 ez tax forms Exempt, except for certain payments to S corporation employees who are 2% shareholders. 2011 1040 ez tax forms Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). 2011 1040 ez tax forms Adoption assistance Exempt1,3 Taxable Taxable Athletic facilities Exempt if substantially all use during the calendar year is by employees, their spouses, and their dependent children and the facility is operated by the employer on premises owned or leased by the employer. 2011 1040 ez tax forms De minimis (minimal) benefits Exempt Exempt Exempt Dependent care assistance Exempt3 up to certain limits, $5,000 ($2,500 for married employee filing separate return). 2011 1040 ez tax forms Educational assistance Exempt up to $5,250 of benefits each year. 2011 1040 ez tax forms (See Educational Assistance , later in this section. 2011 1040 ez tax forms ) Employee discounts Exempt3 up to certain limits. 2011 1040 ez tax forms (See Employee Discounts , later in this section. 2011 1040 ez tax forms ) Employee stock options See Employee Stock Options , later in this section. 2011 1040 ez tax forms Employer-provided cell phones Exempt if provided primarily for noncompensatory business purposes. 2011 1040 ez tax forms Group-term life insurance coverage Exempt Exempt1,4, 7 up to cost of $50,000 of coverage. 2011 1040 ez tax forms (Special rules apply to former employees. 2011 1040 ez tax forms ) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. 2011 1040 ez tax forms (See Health Savings Accounts , later in this section. 2011 1040 ez tax forms ) Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. 2011 1040 ez tax forms Meals Exempt if furnished on your business premises for your convenience. 2011 1040 ez tax forms Exempt if de minimis. 2011 1040 ez tax forms Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them. 2011 1040 ez tax forms No-additional-cost services Exempt3 Exempt3 Exempt3 Retirement planning services Exempt5 Exempt5 Exempt5 Transportation (commuting) benefits Exempt1 up to certain limits if for rides in a commuter highway vehicle and/or transit passes ($130), qualified parking ($250), or qualified bicycle commuting reimbursement6 ($20). 2011 1040 ez tax forms (See Transportation (Commuting) Benefits , later in this section. 2011 1040 ez tax forms ) Exempt if de minimis. 2011 1040 ez tax forms Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). 2011 1040 ez tax forms Working condition benefits Exempt Exempt Exempt 1 Exemption does not apply to S corporation employees who are 2% shareholders. 2011 1040 ez tax forms 2 Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees. 2011 1040 ez tax forms 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. 2011 1040 ez tax forms 4 Exemption does not apply to certain key employees under a plan that favors those employees. 2011 1040 ez tax forms 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. 2011 1040 ez tax forms 6 If the employee receives a qualified bicycle commuting reimbursement in a qualified bicycle commuting month, the employee cannot receive commuter highway vehicle, transit pass, or qualified parking benefits in that same month. 2011 1040 ez tax forms 7 You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. 2011 1040 ez tax forms Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. 2011 1040 ez tax forms Also, show it in box 12 with code “C. 2011 1040 ez tax forms ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. 2011 1040 ez tax forms Accident and Health Benefits This exclusion applies to contributions you make to an accident or health plan for an employee, including the following. 2011 1040 ez tax forms Contributions to the cost of accident or health insurance including qualified long-term care insurance. 2011 1040 ez tax forms Contributions to a separate trust or fund that directly or through insurance provides accident or health benefits. 2011 1040 ez tax forms Contributions to Archer MSAs or health savings accounts (discussed in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans). 2011 1040 ez tax forms This exclusion also applies to payments you directly or indirectly make to an employee under an accident or health plan for employees that are either of the following. 2011 1040 ez tax forms Payments or reimbursements of medical expenses. 2011 1040 ez tax forms Payments for specific injuries or illnesses (such as the loss of the use of an arm or leg). 2011 1040 ez tax forms The payments must be figured without regard to any period of absence from work. 2011 1040 ez tax forms Accident or health plan. 2011 1040 ez tax forms   This is an arrangement that provides benefits for your employees, their spouses, their dependents, and their children (under age 27) in the event of personal injury or sickness. 2011 1040 ez tax forms The plan may be insured or noninsured and does not need to be in writing. 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For this exclusion, treat the following individuals as employees. 2011 1040 ez tax forms A current common-law employee. 2011 1040 ez tax forms A full-time life insurance agent who is a current statutory employee. 2011 1040 ez tax forms A retired employee. 2011 1040 ez tax forms A former employee you maintain coverage for based on the employment relationship. 2011 1040 ez tax forms A widow or widower of an individual who died while an employee. 2011 1040 ez tax forms A widow or widower of a retired employee. 2011 1040 ez tax forms For the exclusion of contributions to an accident or health plan, a leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2011 1040 ez tax forms Special rule for certain government plans. 2011 1040 ez tax forms   For certain government accident and health plans, payments to a deceased plan participant's beneficiary may qualify for the exclusion from gross income if the other requirements for exclusion are met. 2011 1040 ez tax forms See section 105(j) for details. 2011 1040 ez tax forms Exception for S corporation shareholders. 2011 1040 ez tax forms   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. 2011 1040 ez tax forms A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2011 1040 ez tax forms Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2011 1040 ez tax forms Exclusion from wages. 2011 1040 ez tax forms   You can generally exclude the value of accident or health benefits you provide to an employee from the employee's wages. 2011 1040 ez tax forms Exception for certain long-term care benefits. 2011 1040 ez tax forms   You cannot exclude contributions to the cost of long-term care insurance from an employee's wages subject to federal income tax withholding if the coverage is provided through a flexible spending or similar arrangement. 2011 1040 ez tax forms This is a benefit program that reimburses specified expenses up to a maximum amount that is reasonably available to the employee and is less than five times the total cost of the insurance. 2011 1040 ez tax forms However, you can exclude these contributions from the employee's wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. 2011 1040 ez tax forms S corporation shareholders. 2011 1040 ez tax forms   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the value of accident or health benefits you provide to the employee in the employee's wages subject to federal income tax withholding. 2011 1040 ez tax forms However, you can exclude the value of these benefits (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. 2011 1040 ez tax forms Exception for highly compensated employees. 2011 1040 ez tax forms   If your plan is a self-insured medical reimbursement plan that favors highly compensated employees, you must include all or part of the amounts you pay to these employees in their wages subject to federal income tax withholding. 2011 1040 ez tax forms However, you can exclude these amounts (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. 2011 1040 ez tax forms   A self-insured plan is a plan that reimburses your employees for medical expenses not covered by an accident or health insurance policy. 2011 1040 ez tax forms   A highly compensated employee for this exception is any of the following individuals. 2011 1040 ez tax forms One of the five highest paid officers. 2011 1040 ez tax forms An employee who owns (directly or indirectly) more than 10% in value of the employer's stock. 2011 1040 ez tax forms An employee who is among the highest paid 25% of all employees (other than those who can be excluded from the plan). 2011 1040 ez tax forms   For more information on this exception, see section 105(h) of the Internal Revenue Code and its regulations. 2011 1040 ez tax forms COBRA premiums. 2011 1040 ez tax forms   The exclusion for accident and health benefits applies to amounts you pay to maintain medical coverage for a current or former employee under the Combined Omnibus Budget Reconciliation Act of 1986 (COBRA). 2011 1040 ez tax forms The exclusion applies regardless of the length of employment, whether you directly pay the premiums or reimburse the former employee for premiums paid, and whether the employee's separation is permanent or temporary. 2011 1040 ez tax forms Achievement Awards This exclusion applies to the value of any tangible personal property you give to an employee as an award for either length of service or safety achievement. 2011 1040 ez tax forms The exclusion does not apply to awards of cash, cash equivalents, gift certificates, or other intangible property such as vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, and other securities. 2011 1040 ez tax forms The award must meet the requirements for employee achievement awards discussed in chapter 2 of Publication 535, Business Expenses. 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For this exclusion, treat the following individuals as employees. 2011 1040 ez tax forms A current employee. 2011 1040 ez tax forms A former common-law employee you maintain coverage for in consideration of or based on an agreement relating to prior service as an employee. 2011 1040 ez tax forms A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2011 1040 ez tax forms Exception for S corporation shareholders. 2011 1040 ez tax forms   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. 2011 1040 ez tax forms A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2011 1040 ez tax forms Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2011 1040 ez tax forms Exclusion from wages. 2011 1040 ez tax forms   You can generally exclude the value of achievement awards you give to an employee from the employee's wages if their cost is not more than the amount you can deduct as a business expense for the year. 2011 1040 ez tax forms The excludable annual amount is $1,600 ($400 for awards that are not “qualified plan awards”). 2011 1040 ez tax forms See chapter 2 of Publication 535 for more information about the limit on deductions for employee achievement awards. 2011 1040 ez tax forms    To determine for 2014 whether an achievement award is a “qualified plan award” under the deduction rules described in Publication 535, treat any employee who received more than $115,000 in pay for 2013 as a highly compensated employee. 2011 1040 ez tax forms   If the cost of awards given to an employee is more than your allowable deduction, include in the employee's wages the larger of the following amounts. 2011 1040 ez tax forms The part of the cost that is more than your allowable deduction (up to the value of the awards). 2011 1040 ez tax forms The amount by which the value of the awards exceeds your allowable deduction. 2011 1040 ez tax forms Exclude the remaining value of the awards from the employee's wages. 2011 1040 ez tax forms Adoption Assistance An adoption assistance program is a separate written plan of an employer that meets all of the following requirements. 2011 1040 ez tax forms It benefits employees who qualify under rules set up by you, which do not favor highly compensated employees or their dependents. 2011 1040 ez tax forms To determine whether your plan meets this test, do not consider employees excluded from your plan who are covered by a collective bargaining agreement, if there is evidence that adoption assistance was a subject of good-faith bargaining. 2011 1040 ez tax forms It does not pay more than 5% of its payments during the year for shareholders or owners (or their spouses or dependents). 2011 1040 ez tax forms A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. 2011 1040 ez tax forms You give reasonable notice of the plan to eligible employees. 2011 1040 ez tax forms Employees provide reasonable substantiation that payments or reimbursements are for qualifying expenses. 2011 1040 ez tax forms For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. 2011 1040 ez tax forms The employee was a 5% owner at any time during the year or the preceding year. 2011 1040 ez tax forms The employee received more than $115,000 in pay for the preceding year. 2011 1040 ez tax forms You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2011 1040 ez tax forms You must exclude all payments or reimbursements you make under an adoption assistance program for an employee's qualified adoption expenses from the employee's wages subject to federal income tax withholding. 2011 1040 ez tax forms However, you cannot exclude these payments from wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. 2011 1040 ez tax forms For more information, see the Instructions for Form 8839, Qualified Adoption Expenses. 2011 1040 ez tax forms You must report all qualifying adoption expenses you paid or reimbursed under your adoption assistance program for each employee for the year in box 12 of the employee's Form W-2. 2011 1040 ez tax forms Use code “T” to identify this amount. 2011 1040 ez tax forms Exception for S corporation shareholders. 2011 1040 ez tax forms   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. 2011 1040 ez tax forms A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2011 1040 ez tax forms Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, including using the benefit as a reduction in distributions to the 2% shareholder. 2011 1040 ez tax forms Athletic Facilities You can exclude the value of an employee's use of an on-premises gym or other athletic facility you operate from an employee's wages if substantially all use of the facility during the calendar year is by your employees, their spouses, and their dependent children. 2011 1040 ez tax forms For this purpose, an employee's dependent child is a child or stepchild who is the employee's dependent or who, if both parents are deceased, has not attained the age of 25. 2011 1040 ez tax forms On-premises facility. 2011 1040 ez tax forms   The athletic facility must be located on premises you own or lease. 2011 1040 ez tax forms It does not have to be located on your business premises. 2011 1040 ez tax forms However, the exclusion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For this exclusion, treat the following individuals as employees. 2011 1040 ez tax forms A current employee. 2011 1040 ez tax forms A former employee who retired or left on disability. 2011 1040 ez tax forms A widow or widower of an individual who died while an employee. 2011 1040 ez tax forms A widow or widower of a former employee who retired or left on disability. 2011 1040 ez tax forms A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2011 1040 ez tax forms A partner who performs services for a partnership. 2011 1040 ez tax forms De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. 2011 1040 ez tax forms A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. 2011 1040 ez tax forms Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare. 2011 1040 ez tax forms Examples of de minimis benefits include the following. 2011 1040 ez tax forms Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes. 2011 1040 ez tax forms See Employer-Provided Cell Phones , later in this section, for details. 2011 1040 ez tax forms Occasional personal use of a company copying machine if you sufficiently control its use so that at least 85% of its use is for business purposes. 2011 1040 ez tax forms Holiday gifts, other than cash, with a low fair market value. 2011 1040 ez tax forms Group-term life insurance payable on the death of an employee's spouse or dependent if the face amount is not more than $2,000. 2011 1040 ez tax forms Meals. 2011 1040 ez tax forms See Meals , later in this section, for details. 2011 1040 ez tax forms Occasional parties or picnics for employees and their guests. 2011 1040 ez tax forms Occasional tickets for theater or sporting events. 2011 1040 ez tax forms Transportation fare. 2011 1040 ez tax forms See Transportation (Commuting) Benefits , later in this section, for details. 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For this exclusion, treat any recipient of a de minimis benefit as an employee. 2011 1040 ez tax forms Dependent Care Assistance This exclusion applies to household and dependent care services you directly or indirectly pay for or provide to an employee under a dependent care assistance program that covers only your employees. 2011 1040 ez tax forms The services must be for a qualifying person's care and must be provided to allow the employee to work. 2011 1040 ez tax forms These requirements are basically the same as the tests the employee would have to meet to claim the dependent care credit if the employee paid for the services. 2011 1040 ez tax forms For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For this exclusion, treat the following individuals as employees. 2011 1040 ez tax forms A current employee. 2011 1040 ez tax forms A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2011 1040 ez tax forms Yourself (if you are a sole proprietor). 2011 1040 ez tax forms A partner who performs services for a partnership. 2011 1040 ez tax forms Exclusion from wages. 2011 1040 ez tax forms   You can exclude the value of benefits you provide to an employee under a dependent care assistance program from the employee's wages if you reasonably believe that the employee can exclude the benefits from gross income. 2011 1040 ez tax forms   An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. 2011 1040 ez tax forms This limit is reduced to $2,500 for married employees filing separate returns. 2011 1040 ez tax forms   However, the exclusion cannot be more than the smaller of the earned income of either the employee or employee's spouse. 2011 1040 ez tax forms Special rules apply to determine the earned income of a spouse who is either a student or not able to care for himself or herself. 2011 1040 ez tax forms For more information on the earned income limit, see Publication 503. 2011 1040 ez tax forms Exception for highly compensated employees. 2011 1040 ez tax forms   You cannot exclude dependent care assistance from the wages of a highly compensated employee unless the benefits provided under the program do not favor highly compensated employees and the program meets the requirements described in section 129(d) of the Internal Revenue Code. 2011 1040 ez tax forms   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. 2011 1040 ez tax forms The employee was a 5% owner at any time during the year or the preceding year. 2011 1040 ez tax forms The employee received more than $115,000 in pay for the preceding year. 2011 1040 ez tax forms You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2011 1040 ez tax forms Form W-2. 2011 1040 ez tax forms   Report the value of all dependent care assistance you provide to an employee under a dependent care assistance program in box 10 of the employee's Form W-2. 2011 1040 ez tax forms Include any amounts you cannot exclude from the employee's wages in boxes 1, 3, and 5. 2011 1040 ez tax forms Report both the nontaxable portion of assistance (up to $5,000) and any assistance above the amount that is non-taxable to the employee. 2011 1040 ez tax forms Example. 2011 1040 ez tax forms   Company A provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. 2011 1040 ez tax forms In addition, it provides occasional on-site dependent care to its employees at no cost. 2011 1040 ez tax forms Emily, an employee of company A, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. 2011 1040 ez tax forms In addition, Emily used the on-site dependent care several times. 2011 1040 ez tax forms The fair market value of the on-site care was $700. 2011 1040 ez tax forms Emily's Form W-2 should report $5,200 of dependent care assistance in box 10 ($4,500 flexible spending arrangement plus $700 on-site dependent care). 2011 1040 ez tax forms Boxes 1, 3, and 5 should include $200 (the amount in excess of the nontaxable assistance), and applicable taxes should be withheld on that amount. 2011 1040 ez tax forms Educational Assistance This exclusion applies to educational assistance you provide to employees under an educational assistance program. 2011 1040 ez tax forms The exclusion also applies to graduate level courses. 2011 1040 ez tax forms Educational assistance means amounts you pay or incur for your employees' education expenses. 2011 1040 ez tax forms These expenses generally include the cost of books, equipment, fees, supplies, and tuition. 2011 1040 ez tax forms However, these expenses do not include the cost of a course or other education involving sports, games, or hobbies, unless the education: Has a reasonable relationship to your business, or Is required as part of a degree program. 2011 1040 ez tax forms Education expenses do not include the cost of tools or supplies (other than textbooks) your employee is allowed to keep at the end of the course. 2011 1040 ez tax forms Nor do they include the cost of lodging, meals, or transportation. 2011 1040 ez tax forms Educational assistance program. 2011 1040 ez tax forms   An educational assistance program is a separate written plan that provides educational assistance only to your employees. 2011 1040 ez tax forms The program qualifies only if all of the following tests are met. 2011 1040 ez tax forms The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees. 2011 1040 ez tax forms To determine whether your program meets this test, do not consider employees excluded from your program who are covered by a collective bargaining agreement if there is evidence that educational assistance was a subject of good-faith bargaining. 2011 1040 ez tax forms The program does not provide more than 5% of its benefits during the year for shareholders or owners. 2011 1040 ez tax forms A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. 2011 1040 ez tax forms The program does not allow employees to choose to receive cash or other benefits that must be included in gross income instead of educational assistance. 2011 1040 ez tax forms You give reasonable notice of the program to eligible employees. 2011 1040 ez tax forms Your program can cover former employees if their employment is the reason for the coverage. 2011 1040 ez tax forms   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. 2011 1040 ez tax forms The employee was a 5% owner at any time during the year or the preceding year. 2011 1040 ez tax forms The employee received more than $115,000 in pay for the preceding year. 2011 1040 ez tax forms You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For this exclusion, treat the following individuals as employees. 2011 1040 ez tax forms A current employee. 2011 1040 ez tax forms A former employee who retired, left on disability, or was laid off. 2011 1040 ez tax forms A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2011 1040 ez tax forms Yourself (if you are a sole proprietor). 2011 1040 ez tax forms A partner who performs services for a partnership. 2011 1040 ez tax forms Exclusion from wages. 2011 1040 ez tax forms   You can exclude up to $5,250 of educational assistance you provide to an employee under an educational assistance program from the employee's wages each year. 2011 1040 ez tax forms Assistance over $5,250. 2011 1040 ez tax forms   If you do not have an educational assistance plan, or you provide an employee with assistance exceeding $5,250, you must include the value of these benefits as wages, unless the benefits are working condition benefits. 2011 1040 ez tax forms Working condition benefits may be excluded from wages. 2011 1040 ez tax forms Property or a service provided is a working condition benefit to the extent that if the employee paid for it, the amount paid would have been deductible as a business or depreciation expense. 2011 1040 ez tax forms See Working Condition Benefits , later, in this section. 2011 1040 ez tax forms Employee Discounts This exclusion applies to a price reduction you give an employee on property or services you offer to customers in the ordinary course of the line of business in which the employee performs substantial services. 2011 1040 ez tax forms However, it does not apply to discounts on real property or discounts on personal property of a kind commonly held for investment (such as stocks or bonds). 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For this exclusion, treat the following individuals as employees. 2011 1040 ez tax forms A current employee. 2011 1040 ez tax forms A former employee who retired or left on disability. 2011 1040 ez tax forms A widow or widower of an individual who died while an employee. 2011 1040 ez tax forms A widow or widower of an employee who retired or left on disability. 2011 1040 ez tax forms A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. 2011 1040 ez tax forms A partner who performs services for a partnership. 2011 1040 ez tax forms Exclusion from wages. 2011 1040 ez tax forms   You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits. 2011 1040 ez tax forms For a discount on services, 20% of the price you charge nonemployee customers for the service. 2011 1040 ez tax forms For a discount on merchandise or other property, your gross profit percentage times the price you charge nonemployee customers for the property. 2011 1040 ez tax forms   Determine your gross profit percentage in the line of business based on all property you offer to customers (including employee customers) and your experience during the tax year immediately before the tax year in which the discount is available. 2011 1040 ez tax forms To figure your gross profit percentage, subtract the total cost of the property from the total sales price of the property and divide the result by the total sales price of the property. 2011 1040 ez tax forms Exception for highly compensated employees. 2011 1040 ez tax forms   You cannot exclude from the wages of a highly compensated employee any part of the value of a discount that is not available on the same terms to one of the following groups. 2011 1040 ez tax forms All of your employees. 2011 1040 ez tax forms A group of employees defined under a reasonable classification you set up that does not favor highly compensated employees. 2011 1040 ez tax forms   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. 2011 1040 ez tax forms The employee was a 5% owner at any time during the year or the preceding year. 2011 1040 ez tax forms The employee received more than $115,000 in pay for the preceding year. 2011 1040 ez tax forms You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2011 1040 ez tax forms Employee Stock Options There are three kinds of stock options—incentive stock options, employee stock purchase plan options, and nonstatutory (nonqualified) stock options. 2011 1040 ez tax forms Wages for social security, Medicare, and federal unemployment (FUTA) taxes do not include remuneration resulting from the exercise, after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or from any disposition of stock acquired by exercising such an option. 2011 1040 ez tax forms The IRS will not apply these taxes to an exercise before October 23, 2004, of an incentive stock option or an employee stock purchase plan option or to a disposition of stock acquired by such exercise. 2011 1040 ez tax forms Additionally, federal income tax withholding is not required on the income resulting from a disqualifying disposition of stock acquired by the exercise after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or on income equal to the discount portion of stock acquired by the exercise, after October 22, 2004, of an employee stock purchase plan option resulting from any disposition of the stock. 2011 1040 ez tax forms The IRS will not apply federal income tax withholding upon the disposition of stock acquired by the exercise, before October 23, 2004, of an incentive stock option or an employee stock purchase plan option. 2011 1040 ez tax forms However, the employer must report as income in box 1 of Form W-2, (a) the discount portion of stock acquired by the exercise of an employee stock purchase plan option upon disposition of the stock, and (b) the spread (between the exercise price and the fair market value of the stock at the time of exercise) upon a disqualifying disposition of stock acquired by the exercise of an incentive stock option or an employee stock purchase plan option. 2011 1040 ez tax forms An employer must report the excess of the fair market value of stock received upon exercise of a nonstatutory stock option over the amount paid for the stock option on Form W-2 in boxes 1, 3 (up to the social security wage base), 5, and in box 12 using the code “V. 2011 1040 ez tax forms ” See Regulations section 1. 2011 1040 ez tax forms 83-7. 2011 1040 ez tax forms An employee who transfers his or her interest in nonstatutory stock options to the employee's former spouse incident to a divorce is not required to include an amount in gross income upon the transfer. 2011 1040 ez tax forms The former spouse, rather than the employee, is required to include an amount in gross income when the former spouse exercises the stock options. 2011 1040 ez tax forms See Revenue Ruling 2002-22 and Revenue Ruling 2004-60 for details. 2011 1040 ez tax forms You can find Revenue Ruling 2002-22 on page 849 of Internal Revenue Bulletin 2002-19 at www. 2011 1040 ez tax forms irs. 2011 1040 ez tax forms gov/pub/irs-irbs/irb02-19. 2011 1040 ez tax forms pdf. 2011 1040 ez tax forms See Revenue Ruling 2004-60, 2004-24 I. 2011 1040 ez tax forms R. 2011 1040 ez tax forms B. 2011 1040 ez tax forms 1051, available at www. 2011 1040 ez tax forms irs. 2011 1040 ez tax forms gov/irb/2004-24_IRB/ar13. 2011 1040 ez tax forms html. 2011 1040 ez tax forms For more information about employee stock options, see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations. 2011 1040 ez tax forms Employer-Provided Cell Phones The value of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a working condition fringe benefit. 2011 1040 ez tax forms Personal use of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a de minimis fringe benefit. 2011 1040 ez tax forms For the rules relating to these types of benefits, see De Minimis (Minimal) Benefits , earlier in this section, and Working Condition Benefits , later in this section. 2011 1040 ez tax forms Noncompensatory business purposes. 2011 1040 ez tax forms   You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone. 2011 1040 ez tax forms Examples of substantial business reasons include the employer's: Need to contact the employee at all times for work-related emergencies, Requirement that the employee be available to speak with clients at times when the employee is away from the office, and Need to speak with clients located in other time zones at times outside the employee's normal workday. 2011 1040 ez tax forms Cell phones provided to promote goodwill, boost morale, or attract prospective employees. 2011 1040 ez tax forms   You cannot exclude from an employee's wages the value of a cell phone provided to promote goodwill of an employee, to attract a prospective employee, or as a means of providing additional compensation to an employee. 2011 1040 ez tax forms Additional information. 2011 1040 ez tax forms   For additional information on the tax treatment of employer-provided cell phones, see Notice 2011-72, 2011-38 I. 2011 1040 ez tax forms R. 2011 1040 ez tax forms B. 2011 1040 ez tax forms 407, available at  www. 2011 1040 ez tax forms irs. 2011 1040 ez tax forms gov/irb/2011-38_IRB/ar07. 2011 1040 ez tax forms html. 2011 1040 ez tax forms Group-Term Life Insurance Coverage This exclusion applies to life insurance coverage that meets all the following conditions. 2011 1040 ez tax forms It provides a general death benefit that is not included in income. 2011 1040 ez tax forms You provide it to a group of employees. 2011 1040 ez tax forms See The 10-employee rule , later. 2011 1040 ez tax forms It provides an amount of insurance to each employee based on a formula that prevents individual selection. 2011 1040 ez tax forms This formula must use factors such as the employee's age, years of service, pay, or position. 2011 1040 ez tax forms You provide it under a policy you directly or indirectly carry. 2011 1040 ez tax forms Even if you do not pay any of the policy's cost, you are considered to carry it if you arrange for payment of its cost by your employees and charge at least one employee less than, and at least one other employee more than, the cost of his or her insurance. 2011 1040 ez tax forms Determine the cost of the insurance, for this purpose, as explained under Coverage over the limit , later. 2011 1040 ez tax forms Group-term life insurance does not include the following insurance. 2011 1040 ez tax forms Insurance that does not provide general death benefits, such as travel insurance or a policy providing only accidental death benefits. 2011 1040 ez tax forms Life insurance on the life of your employee's spouse or dependent. 2011 1040 ez tax forms However, you may be able to exclude the cost of this insurance from the employee's wages as a de minimis benefit. 2011 1040 ez tax forms See De Minimis (Minimal) Benefits , earlier in this section. 2011 1040 ez tax forms Insurance provided under a policy that provides a permanent benefit (an economic value that extends beyond 1 policy year, such as paid-up or cash surrender value), unless certain requirements are met. 2011 1040 ez tax forms See Regulations section 1. 2011 1040 ez tax forms 79-1 for details. 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For this exclusion, treat the following individuals as employees. 2011 1040 ez tax forms A current common-law employee. 2011 1040 ez tax forms A full-time life insurance agent who is a current statutory employee. 2011 1040 ez tax forms An individual who was formerly your employee under (1) or (2). 2011 1040 ez tax forms A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction and control. 2011 1040 ez tax forms Exception for S corporation shareholders. 2011 1040 ez tax forms   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. 2011 1040 ez tax forms A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2011 1040 ez tax forms Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2011 1040 ez tax forms The 10-employee rule. 2011 1040 ez tax forms   Generally, life insurance is not group-term life insurance unless you provide it to at least 10 full-time employees at some time during the year. 2011 1040 ez tax forms   For this rule, count employees who choose not to receive the insurance unless, to receive it, they must contribute to the cost of benefits other than the group-term life insurance. 2011 1040 ez tax forms For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. 2011 1040 ez tax forms However, do not count an employee who must pay part or all of the cost of permanent benefits to get insurance, unless that employee chooses to receive it. 2011 1040 ez tax forms A permanent benefit is an economic value extending beyond one policy year (for example, a paid-up or cash-surrender value) that is provided under a life insurance policy. 2011 1040 ez tax forms Exceptions. 2011 1040 ez tax forms   Even if you do not meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance. 2011 1040 ez tax forms   Under the first exception, you do not have to meet the 10-employee rule if all the following conditions are met. 2011 1040 ez tax forms If evidence that the employee is insurable is required, it is limited to a medical questionnaire (completed by the employee) that does not require a physical. 2011 1040 ez tax forms You provide the insurance to all your full-time employees or, if the insurer requires the evidence mentioned in (1), to all full-time employees who provide evidence the insurer accepts. 2011 1040 ez tax forms You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements. 2011 1040 ez tax forms See Regulations section 1. 2011 1040 ez tax forms 79-1 for details. 2011 1040 ez tax forms   Under the second exception, you do not have to meet the 10-employee rule if all the following conditions are met. 2011 1040 ez tax forms You provide the insurance under a common plan covering your employees and the employees of at least one other employer who is not related to you. 2011 1040 ez tax forms The insurance is restricted to, but mandatory for, all your employees who belong to, or are represented by, an organization (such as a union) that carries on substantial activities besides obtaining insurance. 2011 1040 ez tax forms Evidence of whether an employee is insurable does not affect an employee's eligibility for insurance or the amount of insurance that employee gets. 2011 1040 ez tax forms   To apply either exception, do not consider employees who were denied insurance for any of the following reasons. 2011 1040 ez tax forms They were 65 or older. 2011 1040 ez tax forms They customarily work 20 hours or less a week or 5 months or less in a calendar year. 2011 1040 ez tax forms They have not been employed for the waiting period given in the policy. 2011 1040 ez tax forms This waiting period cannot be more than 6 months. 2011 1040 ez tax forms Exclusion from wages. 2011 1040 ez tax forms   You can generally exclude the cost of up to $50,000 of group-term life insurance from the wages of an insured employee. 2011 1040 ez tax forms You can exclude the same amount from the employee's wages when figuring social security and Medicare taxes. 2011 1040 ez tax forms In addition, you do not have to withhold federal income tax or pay FUTA tax on any group-term life insurance you provide to an employee. 2011 1040 ez tax forms Coverage over the limit. 2011 1040 ez tax forms   You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. 2011 1040 ez tax forms Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. 2011 1040 ez tax forms Also, show it in box 12 with code “C. 2011 1040 ez tax forms ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. 2011 1040 ez tax forms   Figure the monthly cost of the insurance to include in the employee's wages by multiplying the number of thousands of dollars of all insurance coverage over $50,000 (figured to the nearest $100) by the cost shown in Table 2-2. 2011 1040 ez tax forms For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. 2011 1040 ez tax forms You must prorate the cost from the table if less than a full month of coverage is involved. 2011 1040 ez tax forms Table 2-2. 2011 1040 ez tax forms Cost Per $1,000 of Protection For 1 Month Age Cost Under 25 $ . 2011 1040 ez tax forms 05 25 through 29 . 2011 1040 ez tax forms 06 30 through 34 . 2011 1040 ez tax forms 08 35 through 39 . 2011 1040 ez tax forms 09 40 through 44 . 2011 1040 ez tax forms 10 45 through 49 . 2011 1040 ez tax forms 15 50 through 54 . 2011 1040 ez tax forms 23 55 through 59 . 2011 1040 ez tax forms 43 60 through 64 . 2011 1040 ez tax forms 66 65 through 69 1. 2011 1040 ez tax forms 27 70 and older 2. 2011 1040 ez tax forms 06 You figure the total cost to include in the employee's wages by multiplying the monthly cost by the number of full months' coverage at that cost. 2011 1040 ez tax forms Example. 2011 1040 ez tax forms Tom's employer provides him with group-term life insurance coverage of $200,000. 2011 1040 ez tax forms Tom is 45 years old, is not a key employee, and pays $100 per year toward the cost of the insurance. 2011 1040 ez tax forms Tom's employer must include $170 in his wages. 2011 1040 ez tax forms The $200,000 of insurance coverage is reduced by $50,000. 2011 1040 ez tax forms The yearly cost of $150,000 of coverage is $270 ($. 2011 1040 ez tax forms 15 x 150 x 12), and is reduced by the $100 Tom pays for the insurance. 2011 1040 ez tax forms The employer includes $170 in boxes 1, 3, and 5 of Tom's Form W-2. 2011 1040 ez tax forms The employer also enters $170 in box 12 with code “C. 2011 1040 ez tax forms ” Coverage for dependents. 2011 1040 ez tax forms   Group-term life insurance coverage paid by the employer for the spouse or dependents of an employee may be excludable from income as a de minimis fringe benefit if the face amount is not more than $2,000. 2011 1040 ez tax forms If the face amount is greater than $2,000, the entire cost of the dependent coverage must be included in income unless the amount over $2,000 is purchased with employee contributions on an after-tax basis. 2011 1040 ez tax forms The cost of the insurance is determined by using Table 2-2. 2011 1040 ez tax forms Former employees. 2011 1040 ez tax forms   When group-term life insurance over $50,000 is provided to an employee (including retirees) after his or her termination, the employee share of social security and Medicare taxes on that period of coverage is paid by the former employee with his or her tax return and is not collected by the employer. 2011 1040 ez tax forms You are not required to collect those taxes. 2011 1040 ez tax forms Use the table above to determine the amount of social security and Medicare taxes owed by the former employee for coverage provided after separation from service. 2011 1040 ez tax forms Report those uncollected amounts separately in box 12 of Form W-2 using codes “M” and “N. 2011 1040 ez tax forms ” See the General Instructions for Forms W-2 and W-3 and the Instructions for Form 941. 2011 1040 ez tax forms Exception for key employees. 2011 1040 ez tax forms   Generally, if your group-term life insurance plan favors key employees as to participation or benefits, you must include the entire cost of the insurance in your key employees' wages. 2011 1040 ez tax forms This exception generally does not apply to church plans. 2011 1040 ez tax forms When figuring social security and Medicare taxes, you must also include the entire cost in the employees' wages. 2011 1040 ez tax forms Include the cost in boxes 1, 3, and 5 of Form W-2. 2011 1040 ez tax forms However, you do not have to withhold federal income tax or pay FUTA tax on the cost of any group-term life insurance you provide to an employee. 2011 1040 ez tax forms   For this purpose, the cost of the insurance is the greater of the following amounts. 2011 1040 ez tax forms The premiums you pay for the employee's insurance. 2011 1040 ez tax forms See Regulations section 1. 2011 1040 ez tax forms 79-4T(Q&A 6) for more information. 2011 1040 ez tax forms The cost you figure using Table 2-2. 2011 1040 ez tax forms   For this exclusion, a key employee during 2014 is an employee or former employee who is one of the following individuals. 2011 1040 ez tax forms See section 416(i) of the Internal Revenue Code for more information. 2011 1040 ez tax forms An officer having annual pay of more than $170,000. 2011 1040 ez tax forms An individual who for 2014 was either of the following. 2011 1040 ez tax forms A 5% owner of your business. 2011 1040 ez tax forms A 1% owner of your business whose annual pay was more than $150,000. 2011 1040 ez tax forms   A former employee who was a key employee upon retirement or separation from service is also a key employee. 2011 1040 ez tax forms   Your plan does not favor key employees as to participation if at least one of the following is true. 2011 1040 ez tax forms It benefits at least 70% of your employees. 2011 1040 ez tax forms At least 85% of the participating employees are not key employees. 2011 1040 ez tax forms It benefits employees who qualify under a set of rules you set up that do not favor key employees. 2011 1040 ez tax forms   Your plan meets this participation test if it is part of a cafeteria plan (discussed in section 1) and it meets the participation test for those plans. 2011 1040 ez tax forms   When applying this test, do not consider employees who: Have not completed 3 years of service, Are part-time or seasonal, Are nonresident aliens who receive no U. 2011 1040 ez tax forms S. 2011 1040 ez tax forms source earned income from you, or Are not included in the plan but are in a unit of employees covered by a collective bargaining agreement, if the benefits provided under the plan were the subject of good-faith bargaining between you and employee representatives. 2011 1040 ez tax forms   Your plan does not favor key employees as to benefits if all benefits available to participating key employees are also available to all other participating employees. 2011 1040 ez tax forms Your plan does not favor key employees just because the amount of insurance you provide to your employees is uniformly related to their pay. 2011 1040 ez tax forms S corporation shareholders. 2011 1040 ez tax forms   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the cost of all group-term life insurance coverage you provide the 2% shareholder in his or her wages. 2011 1040 ez tax forms When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages. 2011 1040 ez tax forms Include the cost in boxes 1, 3, and 5 of Form W-2. 2011 1040 ez tax forms However, you do not have to withhold federal income tax or pay federal unemployment tax on the cost of any group-term life insurance coverage you provide to the 2% shareholder. 2011 1040 ez tax forms Health Savings Accounts A Health Savings Account (HSA) is an account owned by a qualified individual who is generally your employee or former employee. 2011 1040 ez tax forms Any contributions that you make to an HSA become the employee's property and cannot be withdrawn by you. 2011 1040 ez tax forms Contributions to the account are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. 2011 1040 ez tax forms The medical expenses must not be reimbursable by insurance or other sources and their payment from HSA funds (distribution) will not give rise to a medical expense deduction on the individual's federal income tax return. 2011 1040 ez tax forms For more information about HSAs, visit the Department of Treasury's website at www. 2011 1040 ez tax forms treasury. 2011 1040 ez tax forms gov and enter “HSA” in the search box. 2011 1040 ez tax forms Eligibility. 2011 1040 ez tax forms   A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance except for permitted insurance listed under section 223(c)(3) or insurance for accidents, disability, dental care, vision care, or long-term care. 2011 1040 ez tax forms For calendar year 2014, a qualifying HDHP must have a deductible of at least $1,250 for self-only coverage or $2,500 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,350 for self-only coverage and $12,700 for family coverage. 2011 1040 ez tax forms   There are no income limits that restrict an individual's eligibility to contribute to an HSA nor is there a requirement that the account owner have earned income to make a contribution. 2011 1040 ez tax forms Exceptions. 2011 1040 ez tax forms   An individual is not a qualified individual if he or she can be claimed as a dependent on another person's tax return. 2011 1040 ez tax forms Also, an employee's participation in a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) generally disqualifies the individual (and employer) from making contributions to his or her HSA. 2011 1040 ez tax forms However, an individual may qualify to participate in an HSA if he or she is participating in only a limited-purpose FSA or HRA or a post-deductible FSA. 2011 1040 ez tax forms For more information, see Other employee health plans in Publication 969. 2011 1040 ez tax forms Employer contributions. 2011 1040 ez tax forms   Up to specified dollar limits, cash contributions to the HSA of a qualified individual (determined monthly) are exempt from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. 2011 1040 ez tax forms For 2014, you can contribute up to $3,300 for self-only coverage or $6,550 for family coverage to a qualified individual's HSA. 2011 1040 ez tax forms   The contribution amounts listed above are increased by $1,000 for a qualified individual who is age 55 or older at any time during the year. 2011 1040 ez tax forms For two qualified individuals who are married to each other and who each are age 55 or older at any time during the year, each spouse's contribution limit is increased by $1,000 provided each spouse has a separate HSA. 2011 1040 ez tax forms No contributions can be made to an individual's HSA after he or she becomes enrolled in Medicare Part A or Part B. 2011 1040 ez tax forms Nondiscrimination rules. 2011 1040 ez tax forms    Your contribution amount to an employee's HSA must be comparable for all employees who have comparable coverage during the same period. 2011 1040 ez tax forms Otherwise, there will be an excise tax equal to 35% of the amount you contributed to all employees' HSAs. 2011 1040 ez tax forms   For guidance on employer comparable contributions to HSAs under section 4980G in instances where an employee has not established an HSA by December 31 and in instances where an employer accelerates contributions for the calendar year for employees who have incurred qualified medical expenses, see Regulations section 54. 2011 1040 ez tax forms 4980G-4. 2011 1040 ez tax forms Exception. 2011 1040 ez tax forms   The Tax Relief and Health Care Act of 2006 allows employers to make larger HSA contributions for a nonhighly compensated employee than for a highly compensated employee. 2011 1040 ez tax forms A highly compensated employee for 2014 is an employee who meets either of the following tests. 2011 1040 ez tax forms The employee was a 5% owner at any time during the year or the preceding year. 2011 1040 ez tax forms The employee received more than $115,000 in pay for the preceding year. 2011 1040 ez tax forms You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. 2011 1040 ez tax forms Partnerships and S corporations. 2011 1040 ez tax forms   Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. 2011 1040 ez tax forms Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances. 2011 1040 ez tax forms Cafeteria plans. 2011 1040 ez tax forms   You may contribute to an employee's HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. 2011 1040 ez tax forms However, cafeteria plan nondiscrimination rules still apply. 2011 1040 ez tax forms For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. 2011 1040 ez tax forms Contributions that favor lower-paid employees are not prohibited. 2011 1040 ez tax forms Reporting requirements. 2011 1040 ez tax forms   You must report your contributions to an employee's HSA in box 12 of Form W-2 using code “W. 2011 1040 ez tax forms ” The trustee or custodian of the HSA, generally a bank or insurance company, reports distributions from the HSA using Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. 2011 1040 ez tax forms Lodging on Your Business Premises You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests. 2011 1040 ez tax forms It is furnished on your business premises. 2011 1040 ez tax forms It is furnished for your convenience. 2011 1040 ez tax forms The employee must accept it as a condition of employment. 2011 1040 ez tax forms Different tests may apply to lodging furnished by educational institutions. 2011 1040 ez tax forms See section 119(d) of the Internal Revenue Code for details. 2011 1040 ez tax forms The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging. 2011 1040 ez tax forms On your business premises. 2011 1040 ez tax forms   For this exclusion, your business premises is generally your employee's place of work. 2011 1040 ez tax forms For special rules that apply to lodging furnished in a camp located in a foreign country, see section 119(c) of the Internal Revenue Code and its regulations. 2011 1040 ez tax forms For your convenience. 2011 1040 ez tax forms   Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. 2011 1040 ez tax forms You furnish the lodging to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. 2011 1040 ez tax forms This is true even if a law or an employment contract provides that the lodging is furnished as pay. 2011 1040 ez tax forms However, a written statement that the lodging is furnished for your convenience is not sufficient. 2011 1040 ez tax forms Condition of employment. 2011 1040 ez tax forms   Lodging meets this test if you require your employees to accept the lodging because they need to live on your business premises to be able to properly perform their duties. 2011 1040 ez tax forms Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging. 2011 1040 ez tax forms   It does not matter whether you must furnish the lodging as pay under the terms of an employment contract or a law fixing the terms of employment. 2011 1040 ez tax forms Example. 2011 1040 ez tax forms A hospital gives Joan, an employee of the hospital, the choice of living at the hospital free of charge or living elsewhere and receiving a cash allowance in addition to her regular salary. 2011 1040 ez tax forms If Joan chooses to live at the hospital, the hospital cannot exclude the value of the lodging from her wages because she is not required to live at the hospital to properly perform the duties of her employment. 2011 1040 ez tax forms S corporation shareholders. 2011 1040 ez tax forms   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. 2011 1040 ez tax forms A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. 2011 1040 ez tax forms Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. 2011 1040 ez tax forms Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. 2011 1040 ez tax forms De Minimis Meals You can exclude any occasional meal or meal money you provide to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable. 2011 1040 ez tax forms The exclusion applies, for example, to the following items. 2011 1040 ez tax forms Coffee, doughnuts, or soft drinks. 2011 1040 ez tax forms Occasional meals or meal money provided to enable an employee to work overtime. 2011 1040 ez tax forms However, the exclusion does not apply to meal money figured on the basis of hours worked. 2011 1040 ez tax forms Occasional parties or picnics for employees and their guests. 2011 1040 ez tax forms This exclusion also applies to meals you provide at an employer-operated eating facility for employees if the annual revenue from the facility equals or exceeds the direct costs of the facility. 2011 1040 ez tax forms For this purpose, your revenue from providing a meal is considered equal to the facility's direct operating costs to provide that meal if its value can be excluded from an employee's wages as explained under Meals on Your Business Premises , later. 2011 1040 ez tax forms If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. 2011 1040 ez tax forms The 50% limit on deductions for the cost of meals does not apply. 2011 1040 ez tax forms The deduction limit on meals is discussed in chapter 2 of Publication 535. 2011 1040 ez tax forms Employee. 2011 1040 ez tax forms   For this exclusion, treat any recipient of a de minimis meal as