Taxation of Compensation and Benefits, 2008

Taxation of Compensation and Benefits explains the tax rules and regulations governing 35 major compensation and benefits areas--from accident and health plans to employee stock-purchase plans to golden parachutes. It provides computations and examples throughout showing how to make the benefit computations for Social Security and Medicare, providing step-by-step actuarial computations for funding a defined benefit pension plan, computations for the golden parachute tax, and showing the best combination of qualified and nonqualified benefit plans. Highlights for the 2008 edition include: * The book was updated for the changes made by the Small Business and Work Opportunity Tax Act of 2007, the Tax Relief and Health Care Act of 2006, the Tax Increase Prevention and Reconciliation Act of 2006, and the Pension Protection Act of 2006. * The fringe benefit rules in Chapter 2 were updated for 2008. Section 2.03[T] discusses the new rules issued in 2007 for determining the deductible employee expenses for lodging, meals and incidental expenses while traveling away from home. * Section 3.02[E] was added regarding the proposed regulations in 2007 on payments by a qualified employer plan for accident and health insurance. * Section 3.05[D] was revised regarding the new IRS rulings and regulations on long-term care insurance and deductibility of long-term care services. * Section 3.18 was revised regarding the final IRS regulations issued in 2007 on health savings accounts. * Chapter 4 was revised regarding the new rules that took effect in 2008 on automobile expense deductions for employees. * Chapter 6 was rewritten based on the new proposed regulations in 2007 (on which taxpayers may rely) for cafeteria plans, flexible spending accounts, and premium conversion plans. Section 7.01 was updated regarding the final IRS regulations in 2007 on child and daycare expenses. * Chapter 9 was updated regarding the procedures for avoiding the tax on golden parachute payments, including the 299 waivers. * Chapter 10 was updated regarding the new foreign earned income exclusion rules that apply after 2006, including the computations of the foreign earned income exclusion and the foreign housing cost exclusion. * Chapter 12 was updated to include the 2007 cases on reasonable compensation. * Section 13.02[A][2] discusses the requirement under the new law that nonqualified stock options must normally be granted at 100 percent of the fair market value on the date of grant. Section 13.02[C] discusses the new requirement that a discounted stock options may be exercised only in a single tax year specified in advance under the option agreement. Section 13.10 was updated regarding the 2007 ruling on transfers of stock options to a spouse incident to divorce. * Section 15.02[D] discusses the final IRS regulations on forfeiture restrictions for restricted stock. * Section 17.05 discusses the new Medicaid rules effective for periods after February 8, 2006, and the new rules permitting Medicaid applicants to transfer their assets to family members prior to qualifying for long-term care under the Medicaid program. * Section 19.02[K] discusses the proposed IRS regulations issued in December, 2007 on cash balance plans. * Section 19.11 discusses the proposed IRS regulations issued in August, 2007 on defined benefit pension plans and in December 2007 on funding requirements for defined benefit plans. * Section 19.12 discusses the final regulations issued in 2007 on annual additions to qualified employer plans. * Chapter 20 discusses the final IRS regulations on deferred compensation under IRC Section 409A. * Sections 20.04 and 20.05 discuss the 2007 Revenue Ruling on the tax treatment of funded deferred compensation plans.