Imputed Income on (US) paycheck stub

[Mike or Penny Novack]

On 3/31/2015 12:59 AM, Michael Wagner wrote:
> My wife's pay check includes a line called "Imputed Income" - I think 
> it's a tax artifice (the money doesn't show up under deductions or get 
> deposited anywhere, near as I can tell. I think it's way of taxing 
> some fringe benefits.
>
> How do I track "Imputed Income"? Is it an expense?
>
> Is it income account?
>
>
> Mike


Neither. It is an amount you may need for tax purposes but not 
necessarily an "on the books" item for you. For those who don't 
understand what we are talking about I'll give an example. An employer 
is allowed to offer as a "fringe benefit" an insurance policy allowing 
the employee to name the beneficiary. Common is one or more times annual 
salary. The premiums paid for the first 50,000 of any such policy is not 
taxable but the premium for coverage above that is. That amount is the 
sort of thing that appears on your W2 or 1099 as imputed income.

The idea that your books could represent your tax liability is naive. It 
might not be possible to determine what income is taxable and what is 
not until tax return is being filled out. For example, consider SS 
income. Whether your social security gets taxed at all, or if so, what 
percentage of it gets taxed, depends on how much OTHER income you end up 
with!

It might be important to take into consideration other "off the books" 
fringe benefits when considering competing job offers, etc. Use a 
spreadsheet, not accounting software for that.  It can be hard to put 
dollar amounts on many of thee in any case.

Michael

-- 
There is no possibility of social justice on a dead planet except the equality of the grave.