Imputed income is the value of a service or benefit that was provided to you by your employer. It is called a fringe benefit, a form of taxable pay that is given in addition to your regular wages. It is added to your gross wages as income, so that employment taxes, including social security and Medicare, can be withheld. A common example is a non-deductible moving expense reimbursement. While it is great that your employer has paid for your moving expenses, you unfortunately may have to pay taxes on some or all of the reimbursement.
Here is a list of imputed income examples:
- Gym membership or fitness incentive;
- Educational assistance;
- Employee discounts;
- Company car personal usage;
- Non-deductible moving expenses;
- Employee benefits provided to a domestic partner.
If your company has provided you with a small fringe benefit like a $25 gift card or tickets to a sporting event, it will most likely not be counted as imputed income. The IRS does not define the dollar amount at which a fringe benefit will be taxed, but it is recommended to be kept at under $100.
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