[jujubetree]

Got the below Qs re individual taxation. Can somebody help to see if the taxable / nontaxable is correct?

1）employee’s rental apartment payment paid by employer (the employee is required to stay in the apartment for the benefit of employer) (fully taxable ?)

2） free foods to employee kids (nontaxable- this is pretty sure )

3） employee purchased safety shoes ( unrelated biz expense 2% itemised deduction? )

4) health insurance provided by employer to the employee and his family ( to employee 50k premium deductible , to family ? probably is the gross income to be taxed?)

Thanks：）

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[Son]

Hi there, below is what I think is the correct treatment of the items you've listed:

1. Employee's rental apartment payment paid by employer (the employee is required to stay in the apartment for the benefit of employer)

Nontaxable fringe benefit. Since this is for the benefit of the employer, the cost of apartment is not taxable to the employee. Think of an oil and gas engineer who is required to live in a desert near an oil well for 6 month: he doesn't benefit from the trailer or apartment he's getting, this is solely because his employer needs him there.

2. Free foods to employee kids.

Taxable income. I've never heard of a deduction or disallowance for meals furnished to employee's KIDS. In cases where room and food is furnished to the employee him/herself for the convenience of the employer (see above), this is non-taxable. When expenses on food of, again, EMPLOYEE is not reimbursed by the employer it falls under misc other deductions subject to 2% AGI floor and can be deducted if the taxpayer chooses to itemize.

3. Employee purchased safety shoes

Itemized deduction (subject to 2% AGI floor)

4. Health insurance provided by employer to the employee and his family

Premiums paid by employer are excludable. Would be interested to hear from others how insurance coverage for family members is treated, but I would guess it's the same (nontaxable)?

AUD - passed
REG - passed
BEC - passed
FAR - passed

[taxgeek83]

For the most part an employee's family is covered under his/her employer-provided insurance policy (there are certainly cases where each spouse is covered under his/her own employer-provided plan, and either one covers the kids or they split them up between the two plans). It still doesn't change the fact that the premiums are not taxable though.

Otherwise I think you are right on. The safety shoes are considered a nonreimbursed employee business expense (Form 2106, flows to Schedule A).

[jujubetree]

premiums paid by employer should should have 50K limit on premium nontaxable exceeding part is taxable.

I think the free foods to employee kids are minimum which should not be taxable

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[Author]

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