richardnhsv
Newbie
Q.Will I need to pay taxes on imputed income for my registered guest?
A. Yes, you will have to pay taxes on imputed income for your registered guest. Internal Revenue Service rules and regulations require that the value of the benefit provided by the employer be considered part of the employee's taxable income. Known as "imputed income," an estimated value of the benefit is reported to the IRS and reflected in the employee's paycheck and on the employee's W-2 form. We use 10 % of the Y fare for calculation of the value of the imputed income. The employee is responsible for the applicable taxes on imputed income.
Example of imputed income: Assumes registered guest flies one-way Washington, D.C. to Los Angeles with a connection in Pittsburgh.
DCA-PIT Y8 fare is $363.00
10% of Y class fare = $36.00
PIT-LAX Y8 fare is $1,264.00
10% of Y class fare = $126.00
Total Imputed Income = $163.00
Federal tax on imputed income
(@28% tax bracket)* = $46.00
* Imputed income also is subject to FICA and state and local taxes where applicable.
(Note: Fares are approximate and for illustrative purposes only.)
So basically... you get $163.00 added to your paycheck and $46.00 is taken out in taxes. On some fares, it can get a little pricey.
A. Yes, you will have to pay taxes on imputed income for your registered guest. Internal Revenue Service rules and regulations require that the value of the benefit provided by the employer be considered part of the employee's taxable income. Known as "imputed income," an estimated value of the benefit is reported to the IRS and reflected in the employee's paycheck and on the employee's W-2 form. We use 10 % of the Y fare for calculation of the value of the imputed income. The employee is responsible for the applicable taxes on imputed income.
Example of imputed income: Assumes registered guest flies one-way Washington, D.C. to Los Angeles with a connection in Pittsburgh.
DCA-PIT Y8 fare is $363.00
10% of Y class fare = $36.00
PIT-LAX Y8 fare is $1,264.00
10% of Y class fare = $126.00
Total Imputed Income = $163.00
Federal tax on imputed income
(@28% tax bracket)* = $46.00
* Imputed income also is subject to FICA and state and local taxes where applicable.
(Note: Fares are approximate and for illustrative purposes only.)
So basically... you get $163.00 added to your paycheck and $46.00 is taken out in taxes. On some fares, it can get a little pricey.
