Leasing the building will allow John to write off the payments as rent expense. However, if he has the capital to purchase the building, it would be considered an asset and he would be allowed to depreciate over the life of the building. This decision would have to weigh factors such as: capital investment, loan options if no capital investment, and expected future profits and expenses of the business. 2. Jane Smith tax issues: Issue a) What are the different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for federal income tax purposes?
PRACTICE TEST – QUIZ 2 ANSWER KEY CHAPTERS 7 - 12 Chapter 7 1. (p. 181) Calculations of pay level include all except _________. a. value of stock options b. benefits c. bonuses D. health care 2. (p. 186) The market pay rate is the _______________ a. rate an employer must pay to hire workers b. pay rate at which applicants will accept a job c. going rate D. point at which supply and demand lines cross 3. (p. 191) ______________ theory is typically associated with greater profits.
Capping the annual earnings at $118,000 stops people that make more money from getting a tax break by the cap. If people that make less have to pay a percentage of their income to social security, then people who make more money should have to pay that percentage too. The argument to this source is that employers don't want to pay the extra taxes and people that make higher wages don't see return on their taxes paid, and that interest in social security would decline. I think that the nation in general would benefit from a national retirement plan, so paying that extra tax money should pay off in the end when we have a solid nation-wide retirement plan that everyone can count
ROTH 401k plan: Retirement Rules & Guidelines Also known as Roth 401k- Roth Introduction to the ROTH 401k plan. A Roth 401k plan is a government initiated company sponsored individual savings plan. Contributions are made on a non-deductible basis--The Roth 401k plan has tax free qualified distributions--The long-term benefits of owning a Roth 401k plan are superior to a traditional 401k, but the traditional 401k is better in the tax deductible contribution phase. Retirement News Center "Wealth Management" News and Services "Retirement Plan Guide" and News "401k" News "Traditional IRA" News and Article "Roth 401K" News and Article "Simple IRA" News and Article "SEP IRA" News and Article "Solo 401k" News and Article
Disability insurance is important because it provides income for employees should they become ill or unable to work. Typical disability insurance plays up to 65 percent of an employee’s income until he or she is able to return back to work. Some employers offer long-term coverage but this is usually offered to employees in the form of an extension or add-on (Wish 2012). Employers usually offer life insurance to its employees for free or very low costs. In most common cases, the standard insurance provided for free by the employer is usually one to two times the employee’s salary in the event of their death.
As a CCPC, CCL will have no tax consequence for the employees receiving the stock options until they dispose of the shares. The amount taxed as employment income in the year of disposal is the difference between the option price and the FMV of the shares at the time of the option was exercised. The employee may be able to claim a deduction from taxable income equal to half this amount if the shares were worth less than the exercise price when the option was issued or the employee hold the shares for at least two years before selling the shares. There are many alternatives to rewarding employees besides cash bonuses and stock options. Options can range from published recognition to merchandise such as shirts that the company makes.
The major components of pension expense b. The amount paid from the pension fund to retirees during the period c. The funded status of the plan and the amounts recognized in the financial statements d. The rates used in measuring the benefit amounts 56. The main purpose of the Pension Benefit Guaranty Corporation is to a. require minimum funding of pensions. b. require plan administrators to publish a comprehensive description and summary of their plans. c. administer terminated plans and to impose liens on the employer's assets for certain unfunded pension
W1 Application Problems (Questions 1,2,3,4,5 and Brief Exercises 1-2, 1-3, 1-4, and 1-5) W2-7 Application Problems Final Exam What is the difference between financial accounting and managerial accounting? Explain the two reasons why the shorter the payback period the more attractive the investment is when the payback technique is used? Distinguish between a master budget and a sales forecast. Explain the nature and importance of a job cost sheet. Distinguish among operating, investing, and financing activities.
There are major differences that separate base pay from incentive pay. Some employers may choose to offer compensation as base pay only, while others offer base pay plus incentive pay. This is often the case for professional sales positions for example. Base pay is the rate of monetary compensation given from employer to employee not including overtime or bonuses. Incentive pay, (which for the scope of this paper has been designated lump sum bonuses paid annually) is a monetary gift provided to an employee based on performance.
Single taxation c. Limited liability d. Dividend policy e. Capital structure Answer: b S-corp Distribution is taxed only once at personal income tax rate. In other words, a single taxation 4. Which of the following mechanisms would be most likely to help motivate managers to act in the best interests of shareholders? a. Decrease the use of restrictive covenants in bond agreements.