12/02/2022 by David Kiley, CPA 0 Comments
Reporting Fringe Benefits as Compensation
Within many business components of business activity may include a personal benefit. When these benefits are more than deminims, specialized reporting and tax treatment is generally warranted. In these cases, the IRS regards fringe benefits as a form of compensation or a reduced deduction.
Some examples of fringe benefits are:
- Company paid group health and dental premiums for certain self-employed individuals
- Certain non-qualified and non-cafeteria plan expenses
- Company paid disability insurance premiums
- Daycare expenses directly or indirectly provided by an employer
- Personal use of a company car
We'll help you navigate reporting requirements and methods for some of the more common fringe benefit most businesses face.
Some of the common methods used to report fringe benefit compensastion include:
- Form W2 for employees
- Form W2 for 2% or greater shareholders (and certain relatives)
- Form K1 for partners
- Form 1099 for contractors
- Loss of Deduction