No one likes paying a tax. It’s like paying a dollar for a dollar. There is income tax, sales tax, property tax, house tax, the list is goes on. But before you start feeling depressed about paying so much of money, be encouraged to learn about some taxes that Internal Revenue Service (IRS) won’t make you pay.
Often employees work late in offices or do overtime for completing some important work. Most of us don’t get paid for overtime but one favor we should always ask from our employer is to feed dinner or pay you in cash for the same. The meal reimbursements are taken from the employer’s income and therefore deductible from employee’s income. But to escape taxation, the cost of the meal reimbursements should be reasonable and occasional. If it’s a daily routine then its taxable.
As a part of an organization, employees usually get discounts, such as getting your children enrolled at reduced rates for college course or 10% discounts on purchase of certain products and services. Such employee discounts are not taxable as long as the available discount is on some product and service generally offered by the employers to the public.
Your employer’s might host group meals or host recreational activities for achieving to encourage team spirit, boost morale and cooperation. Such activities are not gift given out of charity or generosity. The purpose of these activities is to achieve some business target. IRS faces difficulties in determining the value of such activities so these are often excluded from taxation.
Your employer might be generous enough to give some movie or sports tickets. As long as these tickets are given occasionally they are not subject to tax. The IRS doesn’t have the right resources to keep a track of such incomes. So next time, don’t miss the chance and enjoy the show.
Water, Coffee, Soft drinks & more
Every company or organization provides water facilities, which in recent times has gone further to include free coffee, soft drinks and in some cases lunch as well. Now, employees don’t have to go out for lunch or beverages for that matter. Cheer up more to find out that these food facilities are not taxable. So why waste your money on food and beverages.
Turkey, Ham or Goose
Imagine an employer-hosted holiday lunch or dinner, with turkey, ham or goose. The value of such a lunch can be taxed but so is not the case. The IRS has spends hours determining the value of such meals, therefore decided to exclude from tax category.
All employees can use the employer’s phone mainly business and personal purpose. IRS has tried recording and separating the business and personal usage hours, but ended up having nightmares. So phone usage isn’t subject to tax.
The above mentioned taxable benefits are too small to matter for IRS. So why skip the chance of availing benefits from them. If you need any assistance while filing tax extension online contact us.