When is it efficient for the employer to reimburse the employee for business meals and entertainment expenditures? How does the 2% limitation on miscellaneous itemized deductions affect the decision? What nontax factors might influence the decision?
Answer to relevant QuestionsWhen are discretionary bonus plans attractive tax-planning vehicles? What incentives might induce the employer to renege on the bonus? What prevents the employer from reneging? Suppose you will retire in 9 years. Throughout your life you will face a tax rate of 31% and earn an after-tax rate of return of 8% on your investments. Your company’s pension plan earns a 12% return, and the company ...Wahoo, Inc., is a high-tech Internet company. It is trying to decide whether to issue NQOs or ISOs to its employees. Each employee will get 10 options. For purposes of this problem, assume that the options are exercised in 3 ...What is an ESOP? Why has Congress encouraged their use over the years? What are the tax and nontax factors in choosing between compensating employees by way of a pension plan versus a deferred compensation program?
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