Taxable fringe benefits
Taxable fringe benefits are benefits an employer provides to any employee, partner, or independent contractor. A recipient of any taxable fringe benefits, must include the benefit’s fair market value in their annual taxable income calculation. Taxable fringe benefits are subjected to all federal income taxes, as well as FICA and FUTA.
Employees who currently use their own car for business-related driving must take care not to exceed the IRS stated mileage rate as any payments for the excess amount would be considered taxable income.
The following are examples as taxable fringe benefits:
- Any reimbursement for any employee job-related moves of fewer than 50 miles
- Clothing that is suitable for street wear that has been given to employees
- Educational assistance payments that do not relate to the employee’s job or exceed the allowable IRS threshold
- Cash awards and non-cash awards are taxable unless given to charity
- Expense reimbursements lacking an adequate accounting is taxable