[GNC] How do I post Imputed Spotify and Tip Income on Paycheck?

[Adrien Monteleone]

It appears you have two different cases there, and possibly two different answers.

For #1, if that Spotify ‘income’ is spendable in any way, even if you never can convert it to local currency and remove it from the Spotify accounting system, then you can debit some special asset account you create just for that purpose. (it is essentially like a ’store credit’ or ’non-redeemable gift card’)

(call it ‘Imputed Assets:Spotify’ if you like)

I recall reading about some video game rewards that are spendable within games that otherwise could cost you real cash to obtain. Some taxing jurisdictions have determined that this is ‘income’ and therefore taxable. In such cases, the rewards never get converted to cash, but are ’spendable’ on things that would otherwise cost you real cash to buy. If this is the case with your Spotify imputed income, then it *likely* *might* be treated the same way in an accounting transaction.

As for the tip ‘income’, that usually arises from an agreement with an employer and the IRS to ‘assume’ that you receive ‘x’ percentage of sales as tips, regardless of what you declare if less is actually received. (there might be other triggers, but I’m familiar with that one) You’ll be taxed on that assumed tip level. Unfortunately, if you didn’t really receive it, you don’t have it at your disposal as a tangible asset, certainly not ‘cash’.

Exactly what you debit in that case is a good question. I suppose you could create another imputed asset account, but it will grow forever because you can never spend it or dispose of it. It doesn’t exist in reality. Perhaps do a search for something like ‘accounting transaction for imputed tips’ or ‘imputed/assumed income’.

Now, if you really *did* receive physical cash, but just didn’t report it, to the extent at least to cover the imputed tips, then simply record the cash received as a debit against the imputed tip credit. This is just a case of forced income recognition.

Of course, NONE of this is accounting, legal, or tax advice. For that, you need the services of a local professional.

Regards,
Adrien

> On Apr 18, 2020 w16d109, at 10:15 AM, jewelzee5 <jewelzee.parks at gmail.com> wrote:
> 
> After the regular Earnings section of my paycheck, there are two types of
> "imputed" income that are reported on my paycheck:
> 
> 1. Spotify Imputed 
> 2. Imputed Tip Income
> 
> I understand I might enter those amounts as a Credit in income accounts, but
> what accounts should I debit?