APA Benefits and Compensation 3

Question 1

An employer provides an employee with a company car for both business and personal use. How is the personal use portion treated for payroll purposes?

Accepted Answer

Included in wages as a taxable fringe benefit

Answer

Excluded from wages as a working condition fringe benefit

Answer

Excluded from wages up to $5,250 annually

Answer

Included only in FICA wages, not federal income tax wages

Question 2

Which of the following correctly describes the taxation of employer contributions to a qualified 401(k) plan?

Accepted Answer

Excluded from both FICA and federal income tax wages when contributed

Answer

Included in FICA wages but excluded from federal income tax wages

Answer

Included in both FICA and federal income tax wages

Answer

Excluded from FICA only when contributions exceed the annual limit

Question 3

What is the Section 415 annual additions limit for defined contribution plans in 2024?

Accepted Answer

$69,000

Answer

$23,000

Answer

$46,000

Answer

$76,500

Question 4

An employee who is also a 5% owner of the company participates in the company's 401(k) plan. Under the required minimum distribution rules, when must distributions begin?

Accepted Answer

April 1 of the year following the year the employee turns 73

Answer

April 1 of the year following the year the employee retires

Answer

December 31 of the year the employee turns 73

Answer

April 1 of the year following the later of turning 73 or retiring

Question 5

Under IRC Section 129, what is the annual maximum amount that can be excluded from an employee's income for employer-provided dependent care assistance?

Accepted Answer

$5,000 ($2,500 if married filing separately)

Answer

$3,000 for one dependent; $6,000 for two or more

Answer

$10,500 (expanded COVID limit made permanent)

Answer

$7,500 for family coverage

Question 6

A company provides free parking to employees in a lot that costs $300 per month per spot. How is this benefit treated for tax purposes in 2024?

Accepted Answer

Excludable up to $315 per month; excess is taxable

Answer

Fully taxable as the value exceeds the monthly exclusion

Answer

Fully excludable as a working condition fringe benefit

Answer

Taxable only for employees earning over $100,000

Question 7

Which plan document must a qualified retirement plan have to describe the plan's terms and conditions, including eligibility, vesting, and benefit formulas?

Accepted Answer

Summary Plan Description (SPD)

Answer

Summary Annual Report (SAR)

Answer

Form 5500

Answer

Plan adoption agreement only