Cafeteria plans offer benefits, but the price is compliance with complex rules
Article Abstract:
Cafeteria benefits plans are flexible compensation plans that offer employers the ability to respond to the increasingly sophisticated and diverse needs of employees. To avoid taxation of employer-provided benefits, cafeteria plans must be: in writing; legally enforceable; exclusively for the benefit of employees; have the intent of being maintained indefinitely; and pass nondiscrimination tests. The types of plans are: package plan, main benefit or basic benefit plan; the mini-flex plan, the free choice plan, and the benefits bank. Companies wishing to institute a cafeteria plan must do a feasibility study to: determine employee demographics; analyze plan design and the proper method of communicating choices of benefits; and determine the proper plan administrator. After determining the benefits to be offered and coverage levels, the company will choose a plan type. Implementing the plan entails: finalizing the plan design and costing methods; drafting plan documents and summary plan descriptions; and communicating the plan to employees.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1989
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Capitalization of production interest rules
Article Abstract:
Proposed regulations covering the capitalization of production interest rules under Section 263A(f) are being prepared by the IRS. These regulations become effective when they are finalized. The uniform capitalization rules of Section 263A require the capitalization of interest to the production of designated property. The scope of these rules as they apply to designated property, eligible debt, accumulated production expenditures, and other related considerations are discussed in detail. The avoided cost method and the simplified inventory method are also explained and differentiated.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1991
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