Question

TAX PLANNING

Question 33 of 75.

Employee benefits are either:

A.            Tax-deferred or tax-accelerated.

B.            Tax-exempt or tax-deferred.

C.            Tax-accelerated or tax-exempt.

D.            Tax-reduced or tax-deferred.

Answer 1

The correct answer to this question will be option (d) Tax reduced or tax deferred. It is because like wages, salary, commissions, and bonuses that is paid to the staff, the cost of employee benefits is tax deductible(Tax reduced).There can be employment tax savings. If instead of offering benefits, employees' compensation is raised, the additional compensation increases employment taxes. So, if employee benefits are increased then it is tax-reduced.

The other options (a), (b) and (c) are not correct because of the above reason.