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1 TAX SECTION Given by: Given by: John Harabedian John Harabedian Terri Shields Terri Shields A component of the Business/Accounting Certificate Program.

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Presentation on theme: "1 TAX SECTION Given by: Given by: John Harabedian John Harabedian Terri Shields Terri Shields A component of the Business/Accounting Certificate Program."— Presentation transcript:

1 1 TAX SECTION Given by: Given by: John Harabedian John Harabedian Terri Shields Terri Shields A component of the Business/Accounting Certificate Program A component of the Business/Accounting Certificate Program

2 TAX EXEMPT STATUS Rutgers has dual status as a state instrumentality and also as a 501(c) (3) tax-exempt organization. Rutgers has dual status as a state instrumentality and also as a 501(c) (3) tax-exempt organization. In most cases, Rutgers is exempt from state sales tax. Exemption letters can be obtained, if needed, from the Tax Department. In most cases, Rutgers is exempt from state sales tax. Exemption letters can be obtained, if needed, from the Tax Department. Hotel Occupancy tax Hotel Occupancy tax 2

3 Payments to Non-resident Aliens (Processed on a Check Request) Nonresident vs. Resident for US Tax purposes Nonresident vs. Resident for US Tax purposes US Source Income vs. Foreign Source US Source Income vs. Foreign Source Tax Withholding – required unless filing exemption. Tax Withholding – required unless filing exemption. Tax Treaties Form Tax Treaties Form Tax ID # requirements (needed for exemption). Tax ID # requirements (needed for exemption). 3

4 4 Relocation/Moving Expenses Relocation/Moving Expenses Rutgers Policy and Procedures library Rutgers Policy and Procedures library See number Non taxable employee moving expenses: Non taxable employee moving expenses: Actual moving of household goods, one way airline fare per person, or cents per mile in 2010, and hotel if traveling on ground. Actual moving of household goods, one way airline fare per person, or cents per mile in 2010, and hotel if traveling on ground. Taxable moving expenses Taxable moving expenses Reimbursement for any other moving expenses, including house hunting, meals, storage and temporary housing will be reported as gross wages through Payroll on a W-2 form. Reimbursement for any other moving expenses, including house hunting, meals, storage and temporary housing will be reported as gross wages through Payroll on a W-2 form. A component of the Business/Accounting Certificate Program. A component of the Business/Accounting Certificate Program.

5 TAX DEPT WEBSITE Taxation Topics Taxation Topics Tax Exemption Letters and Certificates Tax Exemption Letters and Certificates Tax Links Tax Links cont/tax_department/ cont/tax_department/ cont/tax_department/ cont/tax_department/ Senior Tax Accountant - Anelia Dolan (732) Senior Tax Accountant - Anelia Dolan (732)

6 TABER & AUDIT HISTORY Original Internal Audit Report Original Internal Audit Report Board of Governor mandate Board of Governor mandate SCI Report SCI Report Other Audits Other Audits Job Responsibility Job Responsibility Rutgers Audit Process Rutgers Audit Process 6

7 RU TRAVEL.RUTGERS.EDU Rutgers Policy Rutgers Policy New travel restriction memos New travel restriction memos Per diem meal rates-domestic & foreign & IRS rates Per diem meal rates-domestic & foreign & IRS rates Oanda currency conversion- required for all currency uses Oanda currency conversion- required for all currency uses Mapquest Mapquest RU Travel agencies RU Travel agencies TABER Form &Lost receipt form TABER Form &Lost receipt form 7

8 Travel Policy Amendments State budget travel restrictions State budget travel restrictions Travel on non state accounts has no policy change Travel on non state accounts has no policy change Out of state travel currently not permitted on state account Out of state travel currently not permitted on state account Amended Policy to be issued Amended Policy to be issued Travel $ pool Travel $ pool State mileage rate of 31 cents State mileage rate of 31 cents 8

9 State Account Restrictions No travel agency permitted No travel agency permitted No cruise ship travel No cruise ship travel No meals for 1 day trips No meals for 1 day trips No meals for in state travel No meals for in state travel No out of state conference registration or business meals on check request or taber No out of state conference registration or business meals on check request or taber No overnight travel in NJ No overnight travel in NJ 9

10 10 IRS-Accountable Plan IRS-Accountable Plan Must meet all 3 of the following conditions or the expenses may be taxable to the traveler: Must meet all 3 of the following conditions or the expenses may be taxable to the traveler: There must be a business connection. There must be a business connection. All business expenses must be substantiated (date, amount, place, and business expense being submitted to the employer within a reasonable time period). All business expenses must be substantiated (date, amount, place, and business expense being submitted to the employer within a reasonable time period). Employees are required to return all advance amounts in excess of substantiated expenses. Employees are required to return all advance amounts in excess of substantiated expenses. Unallowable expenses must be deducted at the end of the TABER in the Less Amount Disallowed field or simply not recorded on page 1 of the TABER. Unallowable expenses must be deducted at the end of the TABER in the Less Amount Disallowed field or simply not recorded on page 1 of the TABER. A component of the Business/Accounting Certificate Program. A component of the Business/Accounting Certificate Program.

11 11 Travel And Business Expense Reports (TABERS) Travel And Business Expense Reports (TABERS) Used for requesting reimbursement for employees out-of-pocket expenses incurred while traveling on University business. Used for requesting reimbursement for employees out-of-pocket expenses incurred while traveling on University business. Also used to reimburse other University business related expenses such as business meals. Also used to reimburse other University business related expenses such as business meals. Can be used to purchase small incidental items under $500 according to the purchasing guidelines. Can be used to purchase small incidental items under $500 according to the purchasing guidelines. A component of the Business/Accounting Certificate Program A component of the Business/Accounting Certificate Program

12 12 Purpose of Travel, Travel Incidentals, and Meal Expense Policy (40.4.1) To make travelers, approvers, deans, directors, and department heads aware of their respective roles and responsibilities when submitting and approving travel and business-related expenses. To make travelers, approvers, deans, directors, and department heads aware of their respective roles and responsibilities when submitting and approving travel and business-related expenses. More restrictive rules/policies may be specified by the deans, directors, and department heads of individual schools, divisions, departments, and/or by the funding source(s), such as external sponsors. More restrictive rules/policies may be specified by the deans, directors, and department heads of individual schools, divisions, departments, and/or by the funding source(s), such as external sponsors. To ensure that reimbursements made to university employees will not be considered taxable income under IRS regulations by maintaining an accountable plan. To ensure that reimbursements made to university employees will not be considered taxable income under IRS regulations by maintaining an accountable plan. A component of the Business/Accounting Certificate Program.

13 13 Travel Advances Travel Advances Generally requested for hotel deposit, transportation, meals & incidentals. Generally requested for hotel deposit, transportation, meals & incidentals. Must use the Travel Advance Form (TAF) available on the RIAS website Must use the Travel Advance Form (TAF) available on the RIAS website Requests for greater than $100 per day of travel must have a justification letter attached request. Requests for greater than $100 per day of travel must have a justification letter attached request. Will not be issued more than 2 weeks prior to the travelers departure date. Will not be issued more than 2 weeks prior to the travelers departure date. Exception – Transportation expenses can be distributed up to 90 days in advance of departure date. Exception – Transportation expenses can be distributed up to 90 days in advance of departure date. A component of the Business/Accounting Certificate Program A component of the Business/Accounting Certificate Program

14 14 Travel Advances (contd) Travel Advances (contd) Settled by submitting a Travel And Business Expense Report (TABER) with appropriate receipts within 60 days of the travelers return to work. Settled by submitting a Travel And Business Expense Report (TABER) with appropriate receipts within 60 days of the travelers return to work. Must be settled before subsequent advances are issued. Must be settled before subsequent advances are issued. Send requests to Division of University Accounting, Room 300, Administrative Services Building, Busch Campus, attn: Lisa Robinson. Questions (x5-3354). Send requests to Division of University Accounting, Room 300, Administrative Services Building, Busch Campus, attn: Lisa Robinson. Questions (x5-3354). A component of the Business/Accounting Certificate Program A component of the Business/Accounting Certificate Program

15 15 Expense Report Requirements Expense Report Requirements Detail of the business reason or purpose for the expenditure, Clear explanations. Detail of the business reason or purpose for the expenditure, Clear explanations. Itemization and all original receipts for every expense over $50,( except meals.) Itemization and all original receipts for every expense over $50,( except meals.) Original signature of the individual traveler requesting reimbursement, and Original signature of the individual traveler requesting reimbursement, and Approval of the TABER by the travelers supervisor or the supervisors designee who does not report to the traveler. Approval of the TABER by the travelers supervisor or the supervisors designee who does not report to the traveler. Traveler must submit the expense report within 60 days. Traveler must submit the expense report within 60 days. TABERs submitted beyond one year after the date(s) of travel will not be reimbursed TABERs submitted beyond one year after the date(s) of travel will not be reimbursed A component of the Business/Accounting Certificate Program A component of the Business/Accounting Certificate Program

16 16 Reimbursable Travel Expenses Commercial Air Commercial Air University will reimburse only for coach class tickets aboard a regularly scheduled commercial carrier. University will reimburse only for coach class tickets aboard a regularly scheduled commercial carrier. For reimbursement of airline ticket purchases, proof of payment for the airline ticket. Boarding passes when possible are to be submitted with the TABER. For reimbursement of airline ticket purchases, proof of payment for the airline ticket. Boarding passes when possible are to be submitted with the TABER. Commercial Bus/Rail Fares Commercial Bus/Rail Fares Reimbursement will be the reasonable actual cost. The ticket stub or a detailed receipt must show the fare. Reimbursement will be the reasonable actual cost. The ticket stub or a detailed receipt must show the fare. A component of the Business/Accounting Certificate Program. A component of the Business/Accounting Certificate Program.

17 17 Reimbursable Travel Expenses (contd) Lodging Reservations Lodging Reservations The trip must be more than 100 miles one-way. Exceptions must be approved, explained and included in the reimbursement request and attached to the TABER. The trip must be more than 100 miles one-way. Exceptions must be approved, explained and included in the reimbursement request and attached to the TABER. The original receipted hotel bill must substantiate the expenses and must specify rate, date(s) of stay The original receipted hotel bill must substantiate the expenses and must specify rate, date(s) of stay Proof of Hotel payment must be attached to TABER. Proof of Hotel payment must be attached to TABER. A component of the business/Accounting Certificate Program.

18 18 Reimbursable Travel Expenses (contd) Car Rental Car Rental Must be a business justification or when there is no other means of transportation. Must be a business justification or when there is no other means of transportation. Reimbursement only to the traveler who signed the rental agreement Reimbursement only to the traveler who signed the rental agreement Original receipts for car rentals and the rental contract must be attached to the TABER. Original receipts for car rentals and the rental contract must be attached to the TABER. Ground Transportation Ground Transportation Includes from the travelers home, or from their work site to the airport, bus, or train cents per mile. Includes from the travelers home, or from their work site to the airport, bus, or train cents per mile. Receipts must show amount and the date of service. Receipts must show amount and the date of service. A Component of the Business/Accounting/Certificate Program. A Component of the Business/Accounting/Certificate Program.

19 19 Reimbursable Travel Expenses (contd) Employee Meal Expenses (3 options) Employee Meal Expenses (3 options) Option 1) Reimbursement for actual expenses up to $60 per day. Option 1) Reimbursement for actual expenses up to $60 per day. Submit itemized original receipts with proof of payment. Submit itemized original receipts with proof of payment. Do not seek reimbursement for a meal that is included in travel, such as at a conference. Conference agenda is required to substantiate meals provided at conference. Do not seek reimbursement for a meal that is included in travel, such as at a conference. Conference agenda is required to substantiate meals provided at conference. Individual meal expense must be a reasonable portion of the $60/day option. Individual meal expense must be a reasonable portion of the $60/day option. A component of the Business/Accounting Certificate Program. A component of the Business/Accounting Certificate Program.

20 20 Reimbursable Travel Expenses (contd) Employee Meal Expenses: Option 2) Meal allowance – no receipts: $30 per day reimbursement or $50 per day from major city chart on travel web site Must be prorated for any day meals are provided at a conference. Must be prorated for any day meals are provided at a conference. This option must be used for entire trip. This option must be used for entire trip. Prorated daily allowance for departure and arrival times on travel dates Prorated daily allowance for departure and arrival times on travel dates A component of the Business/Accounting Certificate Program.

21 21 Reimbursable Travel Expenses (contd) Employee Meal Expenses : Option 3) IRS federal per diem rate from travel web site This option must be used for entire trip. This option must be used for entire trip. Must be prorated for any day meals are provided at a conference. Must be prorated for any day meals are provided at a conference. Prorated daily allowance for departure and arrival times on travel dates Prorated daily allowance for departure and arrival times on travel dates A component of the Business/Accounting Certificate Program.

22 22 Reimbursable Travel Expenses (contd) Employee Meal Expenses: Employee Meal Expenses: % of meal per diem rate when a meal is provided at conference: % of meal per diem rate when a meal is provided at conference: breakfast 20% breakfast 20% lunch 20% lunch 20% dinner 60% dinner 60% A component of the Business/Accounting Certificate Program.

23 23 Reimbursable Travel Expenses (contd) Employee Meal Expenses: Employee Meal Expenses: % of meal per diem for departure date % of meal per diem for departure date 12:01 am to 7:00am 100% 12:01 am to 7:00am 100% 7:01am to 1:00pm 80% 7:01am to 1:00pm 80% 1:01pm to 7:00pm 60% 1:01pm to 7:00pm 60% 7:01pm to 12:pm 0% 7:01pm to 12:pm 0% A component of the Business/Accounting Certificate Program.

24 24 Reimbursable Travel Expenses (contd) Employee Meal Expenses: Employee Meal Expenses: % of meal per diem for arrival or return date % of meal per diem for arrival or return date 12:01 am to 7:00am 0% 12:01 am to 7:00am 0% 7:01am to 1:00pm 20% 7:01am to 1:00pm 20% 1:01pm to 7:00pm 40% 1:01pm to 7:00pm 40% 7:01pm to 12:pm 100% 7:01pm to 12:pm 100% A component of the Business/Accounting Certificate Program.

25 25 Business Expenses Business Meals for Meetings Business Meals for Meetings Receipts must be original, itemized and include the providers name and date, the name(s) of any other person included on the bill, and purpose of the meeting. Receipts must be original, itemized and include the providers name and date, the name(s) of any other person included on the bill, and purpose of the meeting. Receipt must indicate that bill was paid. Credit card receipts alone are not acceptable. Receipt must indicate that bill was paid. Credit card receipts alone are not acceptable. To determine if business meal expense is appropriate, consult with your supervisor who should use professional judgment in determining whether: To determine if business meal expense is appropriate, consult with your supervisor who should use professional judgment in determining whether: Topic of discussion (meeting) warrants use of University funds for meal expense. Topic of discussion (meeting) warrants use of University funds for meal expense. Benefit derived from incurring expense is most effective, efficient and productive way to use university resources. Benefit derived from incurring expense is most effective, efficient and productive way to use university resources. Fund are available. Fund are available. A component of the Business/Accounting Certificate Program. A component of the Business/Accounting Certificate Program.

26 Business Expenses UNDER $500 small goods and services for emergency purposes UNDER $500 small goods and services for emergency purposes All violations must be sent to purchasing dept for one time approval if appropriate All violations must be sent to purchasing dept for one time approval if appropriate Use purchasing dept for goods and services over $500 Use purchasing dept for goods and services over $500 26

27 27 Examples of Noncompliance Examples of Noncompliance Missing the reason or business purpose for the reimbursement. Missing the reason or business purpose for the reimbursement. Approving of TABER by subordinates. Approving of TABER by subordinates. Failing to provide receipts for all expenses Failing to provide receipts for all expenses Expenses that are not Rutgers business-related. Expenses that are not Rutgers business-related. Charging alcohol on state and grant accounts. Charging alcohol on state and grant accounts. Meals included in the cost of conference/meeting fees Meals included in the cost of conference/meeting fees Charging a higher per mileage rate for use of personal car than allowed by the University. (Currently, the mileage rate is 31 cents per m) Charging a higher per mileage rate for use of personal car than allowed by the University. (Currently, the mileage rate is 31 cents per m) Seeking reimbursement for mileage and gas expense concurrently. Seeking reimbursement for mileage and gas expense concurrently. Seeking reimbursement for a spouse or family members travel costs Seeking reimbursement for a spouse or family members travel costs A component of the Business/Accounting certificate program. A component of the Business/Accounting certificate program.

28 28 Subcode Review Subcode Review Commonly Used: Commonly Used: 3490 Travel Advances 3490 Travel Advances 3500 Travel/Meals 3500 Travel/Meals 3510 Travel-Recruitment 3510 Travel-Recruitment 3520 Travel-Domestic-DGCA 3520 Travel-Domestic-DGCA 3530 Travel-Foreign-DGCA 3530 Travel-Foreign-DGCA 3540 Travel-Consult-DGCA 3540 Travel-Consult-DGCA 3550 Employee Moving Exp 3550 Employee Moving Exp 3560 Training 3560 Training 3590 Registration/Conf. Fees 3590 Registration/Conf. Fees For a full listing of expense type sub codes see the SC screen on OFIS. A component of the Business/Accounting Certificate Program A component of the Business/Accounting Certificate Program

29 29 Expense Report References Expense Report References Regulations and Procedural Manual Regulations and Procedural Manual Travel, Travel Incidentals and Meal Expense Policy Travel, Travel Incidentals and Meal Expense Policy Policies and Procedures Concerning Employee Relocation Policies and Procedures Concerning Employee Relocation Travel Website See Responsibilities. Travel Website See Responsibilities.www.rutravel.rutgers.edu Call Dept. Business manager Call Dept. Business manager Tax Dept-Terri Shields, Taber compliance Tax Dept-Terri Shields, Taber compliance A component of the Business/Accounting Certificate Program A component of the Business/Accounting Certificate Program

30 30 Questions/Comments/Thoughts from Audience??? Questions/Comments/Thoughts from Audience???


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