Mr. Z was recently promoted to an executive position by his corporate employer. The corporation now requires him to entertain clients much more frequently, and Mr. Z expects to incur at least $1,000 out-of-pocket business entertainment expenses each month. The corporation will either reimburse him directly for these expenses or give him a salary bonus at year-end that indirectly covers his annual expenses. Which option should Mr. Z choose and why?
Answer to relevant QuestionsGreg Company agreed to pay Ms. Bilko $45,000 compensation for services performed for the company. a. Compare the income tax consequences to Greg and Ms. Bilko if she is an employee or if she is an independent contractor. b. ...In 2006, BB granted an incentive stock option (ISO) to Mr. Y to buy 8,000 shares of BB stock at $7 per share for 10 years. At date of grant, BB stock was trading on the AMEX for $6.23 per share. In 2015, Mr. Y exercised the ...Ms. Jost participates in her employer’s Section 401(k) plan, which obligates the employer to contribute 25 cents for every dollar that an employee elects to contribute to the plan. This year, Ms. Jost’s salary is ...Ms. Ray is age 46 and single. Her employer made a $2,895 contribution to her qualified profit-sharing plan account, and she made the maximum contribution to her traditional IRA. Compute her IRA deduction if: a. Ms. Ray’s ...Mr. Kim is a U.S. citizen who has been stationed at his employer’s Tokyo office for the last six years. a. Compute Mr. Kim’s AGI if his only income was his $65,000 salary. b. Compute Mr. Kim’s AGI if his only income ...
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