Payroll Mailbag

Q: We currently reimburse employees who use their own cellphones to make business calls, but then add back those amounts as taxable pay. HR wants us to stop this practice and make those reimbursements a tax-free fringe benefit. Don’t the accountable plan rules apply here?
Q: It’s likely that later this year, one employee will receive a bonus that will boost his supplemental pay to more than $1 million. In anticipation of that, his accountant has informed us that we don’t need to withhold federal income taxes at the 39.6% rate; the employee will pay the tax on his 2015 Form 1040, instead. Is that right—it sounds fishy to us?
Q: A new employee received a signing bonus last November, which he had to repay if he left the company within two years. He did leave, and now we don’t know what to do. Do we need to amend his 2014 W-2 form? What documentation must we collect from him?
Q: A former employee has requested a copy of his 2003 W-2 form. We backed up the data, sent it to a remote storage facility and purged it years ago. It would be extremely burdensome to pull it out now, especially for a former employee. What is the legal requirement for providing employees with copies of old W-2s?
Q: We have employees who change their W-4 forms on an almost weekly basis. This is becoming very burdensome. Management has asked whether there are any regulations that allow us to limit the number of W-4 changes employees can make a year. Also, how do you explain to full-time employees that they’re not exempt from paying federal income taxes?
Q: Employees who aren’t on call, but who are called back to work to handle an emergency, are reimbursed for all of their traveling expenses. Must we include these reimbursements in their income and tax them?