Re:The GOP Tax Plan Will Destroy Graduate Education
by theli0nheart on Tuesday November 07, 2017 @04:07PM
(#15647655)
> As for bartering being taxable, I wonder how employee-only discounts at retail establishments work? Is the discount amount taxable (or should it be taxable)?
I just looked this up on the IRS Employer's Tax Guide to Fringe Benefits [1], and it looks like only discounts on products that are less than gross profit margin are income tax exempt. E.g, if you sell a Widget for $10 and make $2 profit on every sale, you can provide a $2 discount to the employee, and then deduct that $2 from the employee's wages.
Furthermore, employees that are 5% owners or that make more than $120,000 are unable to claim any employee discount deduction.
I just looked this up on the IRS Employer's Tax Guide to Fringe Benefits [1], and it looks like only discounts on products that are less than gross profit margin are income tax exempt. E.g, if you sell a Widget for $10 and make $2 profit on every sale, you can provide a $2 discount to the employee, and then deduct that $2 from the employee's wages.
Furthermore, employees that are 5% owners or that make more than $120,000 are unable to claim any employee discount deduction.
[1]: https://www.irs.gov/pub/irs-pdf/p15b.pdf (p10)