Masonry Magazine April 1973 Page. 18
Taxes
According to the amendment to the regulations, such contributions will be considered to have been contributed by the employee (and no longer by the employer). This would mean, of course, that such amounts would be includible in the employee's gross income as compensation. The proposed regulations specifically state that this provision would not apply to amounts contributed to an exempt trust prior to December 6, 1972.
This amendment would not affect profit-sharing plans in which the employee is given the right to make an irrevocable election each year to take his share of the company's profits in cash or to have the share placed in the profit-sharing trust.
FINANCIAL COUNSELING
The IRS has issued a ruling that certainly is worthy of note. Advice was requested of the IRS on the following facts.
A taxpayer, an executive of a large corporation, was provided financial counseling by a professional counseling firm that was engaged by the corporation for the purpose of providing some of its employees earning large salaries with advice concerning the handling of their personal financial affairs. The service, which cost $3,000, included advice on investment, insurance, real estate, tax planning, preparation of tax returns, retirement benefits and estate planning.
How should the $3,000 be treated for tax purposes? According to the IRS, it is compensation for services rendered and has to be included in the gross income of the employee. The $3,000 would be subject to all of the employment taxes.
However, the IRS did note that section 212 of the tax code allows for the deduction of expenses incurred in connection with the preparation of tax returns as well as fees for the service of investment counsel. Therefore, it might be possible to deduct either all or a good portion of the $3,000, even after including it as gross income. With the possibility of deducting a good portion of the $3,000, this would certainly be an attractive form of compensation. (Rev. Rul. 73-13.)
MAYCO C3OD
SMALL LINE CONCRETE PUMP
For more uses than any other
small line concrete pump!
• Masonry and high-lift grouting, lightweight cellular concrete floors.
• Wet-gunning.
• Slabs and foundations.
• Handles ½" minus aggregate.
• Pumps stiff mixes 400-500′ horizontally and 100' vertically.
Diversify with the C30D into a concrete pumping service.
For name of local MAYCO distributor contact:
MAYCO PUMP CORPORATION
4560 Sperry St., Los Angeles, Ca. 90039/(213) 245-8821
GUARANTEED WAGES
An association of employers negotiated a contract with a union to which their employees belonged. The contract provided for a guaranteed annual income plan. Under the plan, all eligible employees are guaranteed a minimum number of hours of employment per contract year. To remain eligible for the guaranteed annual income, the employee must report for work even though he finds no assignment available. Employer contributions to the association are placed in a special bank account and the employee applies directly to the association for his benefits.
The IRS was asked whether the payments made pursuant to this guaranteed income plan were wages for employment tax purposes. The IRS ruled that this was not a supplemental unemployment compensation plan. The IRS held that the payments under such a guaranted annual income plan were wages for purposes of FICA and FUTA and the withholding income tax. (Rev.Rul. 73-22.)
TELEPHONES FOR DEAF
Here's a refreshing IRS ruling. The IRS has ruled that the cost of specialized equipment, that when used in conjunction with a regular telephone enables a deaf person to communicate with anyone who has identical equipment, is deductible as a medical expense. And even further, the IRS ruled that any expenses incurred for the repair of the equipment is also deductible as a medical expense. (Rev. Rul. 73-53.)
POW'S
The IRS will be giving returning prisoners of war, survivors and members of deceased servicemen's families, and families of those still listed as missing in action very special treatment. An IRS center in Austin, Texas has been designated to handle all POW tax returns and claims.
Under the present law, the combat pay exclusion is to cease when combatant activities terminate. The Treasury Department has sent a proposal to Congress to extend the combat pay extension through any period of hospitalization that continues after hostilities have ceased.
DISABLED TAXPAYERS
Chairman Wilbur Mills of the House Ways & Means Committee has introduced a bill that would provide a deduction for income tax purposes in the case of a disabled individual for expenses (up to $750) for transportation to and from work. The bill provides for an additional income tax exemption for a taxpayer or spouse who is disabled.