It’s not the usual year-end stuff that’ll trip you up — it’s the never-heard-that before questions that can throw you for a loop.

Here are five situations A/P and Payroll folks see just infrequently enough to make them tricky. Test yourself — or your co-workers — to see how well they know the ins and outs of IRS’ regs. Answers below, courtesy of the American Institute of Professional Bookkeepers.

1. An employee passed away during the year, and your company paid death benefits — but not under a plan. Those benefits are reported on Form ________.
2. One of your independent contractors is paid $1,000 per contracted job, plus any substantiated expenses for which he submits receipts. On the 1099-MISC, you should include the total of all payments and expenses. True or False.
3. A new employee insists he can use his W-2 as IRS notification of a change of address. True or False?
4. Last year, your company gave every employee a fruit basket (valued at $25) for the holidays. This year, everyone got a $25 gift card to the local grocery store instead. Both gifts are treated the same way for tax purposes.
5. Once a year, your company hosts a holiday party for employees. You don’t have to treat that as taxable income. True or False?

Answers & explanations

1. Form 1099-R
2. False. Substantiated, reimbursed expenses aren’t considered income and shouldn’t be included on the 1099.
3. False.
4. False. A gift card is considered a cash equivalent. Any gift of cash — or a cash equivalent — is taxable.
5. True.

Tags: 1099s, A/P, Communication, IRS regs, Payroll, Resource, Tax compliance, W-2s, Year-end