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: Airfare and rental car $2,000 Meals $1,500 [not purchased in restaurants] Hotel $1,000 Tickets to theater for a client and him $200 Total $4,700 What the income tax consequences to Harley and his employer? O Harley: $3,750 of non-taxable reimbursed expenses, $1,250 of wage income, and pays half the FICA Lax on the wage income Empleyer Deductible expenses for airfare (52,000). meals (5750), hotel ($1,000), entertainment ($200) wage expenze of $300 . and pays half the FICA tax on the wage expense Harley: $4,700 of non-taxable reimbursed expenses, $300 of wage income, and pays haif the FICA tax on the wage income Employer Deductible expenses for airfare ($2,000), meals (5750), hotel (51,000), wages (s500), and pays half the FICA tax on the wage expense O Harley: 54500 of non-taxable reimbursed expenses, $500 of wage income, and pays half the FICA tax on the wage income Employer Deductible expenses for airfare (52,000) meals (51,500), hotel (51,000), wage expense of $500, and pays helf 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