Harley's employer gave him $5,000 to cover expenses for an upcoming sales trip. He is not required to provide any receipts for his expenses, and if his actual expenses are less than $5,000, he does not have to return any money to his employer. His actual expenses for the trip were as follows: What the income tax consequences to Harley and his employer? Harley: $4,700 of non-taxable reimbursed expenses, $300 of wage income, and pays half the FICA tax on the wage income Employer: Deductible expenses for airfare ($2,000), meals ($750), hotel ($1,000), wages ($500), and pays half the FICA tax on the wage expense Harley: $3,750 of non-taxable reimbursed expenses, $1,250 of wage income, and pays half the FICA tax on the wage income Employer: Deductible expenses for airfare ($2,000), meals ($750), hotel ($1,000), entertainment ($200) wage expense of $300, and pays half the FICA tax on the wage expense Harley: $4,500 of non-taxable reimbursed expenses, $500 of wage income, and pays half the FICA tax on the wage income Employer: Deductible expenses for airfare ($2,000), meals ($1,500), hotel ($1,000), wage expense of $500, and pays half the FICA tax on the wage expense Harley: $5,000 of wage income and pays half the FICA tax Employer: $5,000 of wage expense and pays half the FICA tax