Frequent Questions

Q. Is a W-2 or 1099 Form issued to the employee for the amount of tool
reimbursement benefits paid during year?

A. No. Under Section 62 of the Internal Revenue Code, these benefits are not
included in gross income, subjected to taxes, or reportable.

Q. Can the Tool Reimbursement Accountable Plan be considered an improper
characterization of an employee’s compensation?

A. No. Under and Accountable Plan the client is currently compensating each
     employee for time and labor, as well as allowing for reimbursement to the
     employee for tools and equipment purchased by the employee for the benefit
     of the employer.

Q. Can a Tech still claim their tools as an expense on their Tax Return?

A. No. Once enrolled in the Tool Reimbursement program they can no longer
claim their tools on a year end Tax Return.

Q: Does this program provide a better benefit than simply depreciating their tools ?
A: Yes ... The Tool Reimbursement Plan will provide not only a direct benefit
     each pay period, but also not be reduced by the minimum thresholds required
     to receive the tax benefit, and be more than the gain based on their own tax
     bracket reduction of taxes owed.

Q: With W-2 income being lowered, what will this do to a technician's buying
power in relation to getting a loan ?

A: With Tool Reimbursement they are actually more qualified for a loan.
Their after-tax total compensation is actually larger.

Q:Q. What affect will the program have on unemployment compensation ?

A: This program has no impact on the amount of unemployment.

Q: What is the Internal Revenue Service opinion regarding this ?

A: All payments made pursuant to the recent Accountable Plan guidelines
are allowable as long as substantiation can be demonstrated.

Q: What substantiation formula applied to determine the tool reimbursement rate
will be accepted by the IRS ?

A: The formula used is based on reasonable assumptions which have been
reviewed by one of the top legal firm in United States, Schiff Hardin.

Q: What assurance is there for future problems with the Accountable Plan
administered by ToolReimbursement.net?

A: Our program is Powered by SecondCheck^™. They ensure all payments are
    made pursuant to accountable plan guidelines. The IRS issues the rules and
    interpretations concerning accountable plans and SecondCheck^™ complies
    with these guidelines fully and completely, plus we stand behind the program.

Q: What does the program cost ?

A: The administrative transaction fees for the program are deducted from the total
    tool reimbursement payments and not charged separately. All savings within our
    presentations are calculated after these fees are deducted, so there are no
    surprises or hidden fees.

The administrative transaction fee may vary based on agreements with associations and other 3rd parties, as well as the level a participation of the employer. (Optional)

Q: Will my CPA approve this program ?

A: Many CPAs will not be familiar with this program since it is very specific to
    industries that have employees that must own their own tools. This benefit
    program is not unlike a Section 125 plan for medical expenses that allow
    employees to pay for medical expenses and insurance "pre-tax", or mileage
    reimbursements.

The recognition of your CPA of this type of benefit program will be based on the awareness of Industries such as the Construction, Mechanical, and Collision Industries. Check the links section of this website for nationally recognized CPA's that are familiar and recommend Tool Reimbursement.

Q: Do all employees have to participate ?
A: No ... There are no minimum numbers that must participate, but you must offer
    it to all eligible employees, so there is no discrimination. We however are sure
    once their fellow employees begin receiving an increase in net pay, they will
    soon wish to join. New participants can join at any time, but they will not receive
    benefits retro-active.

Q: Are there any long term contracts we must sign ?

A: No ... there are no contracts whatsoever, other than the terms of the End User
License Agreement that allows you to use our website to administer the plan.

We are very sure however, you will continue to be our client once you realize the cost savings and your employees receive their net increased earnings.

Q: Why don't we just do this internally ?

A: You certainly could attempt to do the research and validation for tool
reimbursements, and then opt to take the risk alone ... why would take such a
chance with your business or your employees ?

Q: Does it make a difference whether technicians are paid flat rate/commission or
regular hours worked ?

A: A technician in whatever manner they are paid can benefit from the tool
reimbursement program.

Q: How do we begin ?

A: Depending on your location, we can drop by and provide a benefits program presentation to your company and staff, or you can participate in one of our regular web conferences.

Contact a Representative Today ... Click Here

FAQ's: