The end of the year usually brings a flurry of activity aimed not only at meeting goals, but also hitting important deadlines. Here’s a quick rundown of important dates to note on your calendar.
Due Date for W-2 Forms
Employers are required to file their copies of 2017 W-2 forms with the Social Security Administration (SSA) no later than January 31, 2018. The deadline also applies to certain 1099-MISC forms reporting non-employee compensation, such as payments to independent contractors.
Employers unable to make the deadline can request a 30-day extension by filing Form 8809, Application for Extension of Time to File Information Returns, by January 31. This is the only extension available for filing these W-2s and is not automatically approved.
Due Dates for Most ACA Forms
* = Electronic filing is required for any employer with 250 or more information returns during the calendar year.
While those are the major dates to know, you can use the IRS’s Tax Calendar for Business & Self Employed to stay updated on all important IRS deadlines as the year comes to an end.
6 Common Taxable Fringe Benefits
Fringe benefits are a great way to attract and retain high quality personnel. While many can be given tax-free, there are some that must be declared as income on an employee’s W-2 form. Here are the basics regarding six of the more common (and commonly overlooked) taxable fringe benefits:
- Personal use of company auto – A company vehicle that can also be used for personal business outside of working hours must be included when reporting an employee’s wages.
- Health insurance premiums for shareholders with a share of greater than 2% – Premiums paid by an S-corporation must be included in the taxable wages of the shareholders and their families.
- Employer provided cell phones – The value of an employer-supplied cell phone is a taxable fringe benefit if it is given solely to promote goodwill, boost morale or attract prospective employees. If the phone is for “substantial business reasons” (e.g., on-call requirement, client contact when away from the office, etc.), it can be excluded from the employee’s income and therefore not taxed.
- Group-term life insurance coverage (greater than $50K) – Coverage is only subject to Social Security and Medicare taxes as long as the policy meets several IRS requirements (such as being provided to at least 10 full-time employees, having a death benefit that isn’t included in income, etc.). If your life insurance plan does not meet the necessary requirements, it is a taxable fringe benefit.
- Meals – Meals that are provided on a regular basis, as well as meal money that is calculated based on the number of hours worked, are a taxable benefit. This rule does not apply to snacks (coffee, doughnuts, etc.) or occasional meals provided by the company for meetings and other events.
- Transportation (commuting) benefits – Transit passes, parking passes, rides in commuter highway vehicles and other forms of commuting benefits are only excluded from taxable income to a certain dollar amount. For example, if your company pays an employee more than $255/month for transit passes and commuter highway vehicle transportation, it is a taxable fringe benefit.
Although we’ve highlighted the six most common instances, there are many other taxable benefits—most of which have specific qualifications, caveats and exceptions. Please review the IRS Employer’s Tax guide to Fringe Benefits for use in 2017, or contact your CPA with questions.
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