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Don't Forget to Report Taxable Benefits on Employee W-2s

As a reminder employee W-2 forms are due January 31.

Reporting taxable benefits correctly is important. Taxable benefits are generally subject to both employer and employee Social Security and Medicare taxes.

Among the most common taxable benefits:

·         Moving expenses (as of 2018, employers can no longer pay this or reimburse on a tax-free basis)

·         Bicycle commuting expenses (as of 2018, employers can no longer pay this or reimburse on a tax-free basis)

·         Group term life insurance in excess of $50,000

·         Employee business expense reimbursements under non-accountable plans. Accountable plans require substantiation as well as a return of any funds in excess of actual expenses.

·         Personal use of company cars

·         Commuting and parking benefits in excess of $260 per month (2018 limit)

·         Health insurance premiums for more-than-2% S-corporation shareholders

·         Employee housing

·         Tax preparation services

·         Gym memberships

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Richard Pon CPA, CFP