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Alt weekend travel airfares have always been taxable benefits i believe
Because it is income and all income is taxable unless a specific deduction applies....
It’s not the IRS. Congress and the President make laws. The IRS implements them. The law taxes all income from whatever source derived
It's not so cut and dried. Alternate travel usually just means spending money that would ordinarily be spent ANYWAY to get home. Which means it's not income. Only spending it to get to a different destination. The nuance is very silly and mostly benefits the firm I believe, as there are less taxes to be paid since it would not be considered a work related expense. If instead of reimbursing you got a per diem which included transportation, it would not be taxable which is why it's kind of messed up
Case and point
I don’t think you understand how gross up works at all...
The gross up is occurring in your pay check. It has nothing to do with what’s paid to Amex.
No gross up:
You buy flight, report as an expense, company repays you for it / direct pays Amex. Then company reports it as income, triggering incremental tax withholding and additional income reported on W2. You pay federal and state tax on value of flight at your marginal income tax rate.
Gross up:
Same as above except company pays you an additional amount of money into your pay check that is sufficient to cover the tax on your flight, plus the tax owed on the gross up payment itself.
If the company pays for you to go somewhere that you want to be that has nothing to do with work, that’s income. It doesn’t matter that the company would have also paid for you to go somewhere that has to do with work. If you have discretion over a big pot of money and can allocate it to your personal use...then spending that money on yourself has to be income. If not, you and your company could create a scheme to shield all of your income (or at least huge amounts) from taxation.
Lots of people admitted to tax fraud then...technically
You can thank the IRS for that
It’s taxable but the firm grosses it up, so they pay the tax for you
Is this your first time alt traveling? Because all of is “taxable income”. But if you read the rest of the email, it should call it out as “grossed up”. Aka, flights are worth 500. You’re taxed at e.g. 10%. Deloitte will add 550 to your income
Ok then maybe my employer just sucks because it doesn't gross up alt travel :/
Most people don’t charge alt travel. They just charge regular travel unless they are flying someone out to them
@D2. My expense was $470. Since this is taxable, and D will gross up, it means D deducts taxes, then reimburses the rest, and at the same time returns those taxes in a different payment to me?
Do I need to manullay pay anything to AMEX as D is not going to pay the reimbursement in full?
@OW. I guess you don't UNDERSTAND the D reimbursement system at all! My payments was/is through the D Amex. The Amex payments are also happening through D. We never log in to AMEX to pay off expenses by ourselves. If the company grosses up the payment, why would they even tell me how their process works. That's not my business. They can play with their money however they want, as long as I'm not impacted nor any action item is assigned to me.
D3: very much illegal. You ALWAYS post it as alt travel. It’s not regular business travel.
OP: Bruh. The email literally says “no action is required by you” lol. So let me take your example and tell you when I mean. Your flights are worth $470. Your income tax (for example) is 10%. Deloitte will “increase” your pay check by $517. $470 is paid to AMEX. $47 is withheld from your paycheck. Your action item? Do diddly squat
I don’t alr travel D2 but this came up on the Deloitte bowl and almost everyone said they never code it as alt travel. They just code it as airfare
D3: ooohhhh. Same point. Very much a big no no. My PC makes a point of letting us know that it should be paid for under Alt travel