Every year we ask the question: Did you have any taxable fringe benefits that need to be reported on your employee’s W-2’s? A lot of employers aren’t sure how to do this properly, so we are here to help. Some of the most common taxable benefits are:
– considered a part of an employee’s compensation. No matter how big or small the bonus; this should be treated as taxable income.
Personal use of a company vehicle
– is to be calculated and added to an employee’s wage. This is easily done by keeping track of three items:
- Total miles the vehicle is driven
- Miles Commuted
- Personal miles
Keeping track of these three items assists in the calculation of the taxable portion of the personal use that should be added to the employee’s W2. Providing these items to us, we can calculate this for you.
Life insurance Premium
– when life insurance is provided to an employee as part of their compensation package, the amount of the premium for coverage over $50,000 is considered taxable income. This income must be reported on the employee’s W-2.
– reimbursements by your business to employees for moving expenses are considered fringe benefits. These benefits are taxable wages to the employee, and they must be included on the employee’s W-2 as taxable income.
An important note to you as an employer is to ensure the above taxable events are done before the end of the year. This is critical so the taxes can be paid in a timely manner and you do not incur any penalties.
If you need help reporting your taxable benefits, we are here to help make your year-end reporting easier.