. . . Yes, the 2018 “Tax Reform” law in the U.S. made employer-paid and employer-reimbursed relocation costs – even when your moving is requested by the employer – income to the employee, and thus taxed to the employee? Yikes!

We all should know that wages, salary, bonuses and employer-granted grants of stock are “income” to the employee, and thus subject to taxes to be paid by the employee.

Some of that changed in the U.S. this year due to our “friends” in Congress, and their so-called “Tax Reform” law that lowered taxes on the wealthy.

Under previous tax law, payment OR reimbursement of most of an employee’s job-related moving expenses were not subject to income taxes or employment taxes (such as Medicare or Social Security.)

However, under last year’s so-called “tax reform” legislation, employers now must include all moving expenses – whether paid by the employer OR reimbursed by the employer – in the employee’s income that they report annually to the IRS.

Employees are warned to take this change into account when considering whether to accept a relocation request, as moving oneself, or an entire family, can be awfully expensive, and doubly so when the amount paid or reimbursed by the employer is also subject to taxes.

You may want to request that your employer (or prospective employer) not only pay for or reimburse you for your relocation costs, but also agree to “Gross Up” that amount that is, also pay you what you will need to pay in taxes, to make up that “tax difference” to you. Alternatively, to “repay” you in some way to address this new tax burden on you.

If you are not familiar with the concept of “Tax Gross Up,” look for our upcoming newsletter to be entitled “Tax Gross Up: What Does That Mean?”

“Knowledge is leverage. Forewarned is forearmed. Look before you leap.” That’s our motto at SkloverWorkingWisdom.com.

[Written and transmitted May 8, 2019.]

(Please note: This email newsletter does not constitute legal or tax advice; for such advice or counsel, you need to consult a lawyer or tax adviser. In addition, laws change, and that includes the present tax law noted above, and, so, reliance upon this email newsletter must take these warnings into account.)

Need to send a model memo or letter to make a request or complaint? A good checklist or form agreement? For a complete list of our Model Letters, Memos, Checklists and Sample Agreements, Just [click here.]

Interested in Membership? It’s free, and has advantages, including discounts on our products. Just [click here.]

Need a private telephone consultation? Just [click here.] Evenings and weekends can usually be accommodated.

© 2019 Alan L. Sklover. All Rights Reserved and Strictly Enforced.

 
“The frequent attempt to conceal mental pain increases the burden: It is easier to say “My tooth is aching” than to say “My heart is broken.”

– C. S. Lewis

ACTUAL CASE HISTORY: Last month an article entitled “How to Ask for a Mental Health Day” appeared in the Wall Street Journal, written by “Work & Life” columnist Sue Shellenbarger. Sue is a well known and well regarded writer on matters of “Work & Life.” I respect and admire her very much. On this subject, in my opinion, she was entirely wrong in her approach and conclusion on this subject.

When I saw the title of the column, I gulped; I said to myself, “She can’t be recommending people request ‘mental health’ days, could she?” When I read the column, I gasped; she seemed to be headed that way. When I finished reading her piece, I groaned; sure enough, she seemed to be recommending that people be “honest” and ask their managers for “mental health” days off when they were needed.

LESSON TO LEARN: While I fully recognize that there is a stigma attached to having a mental health illness, I also view the phrase “mental health day” to be both an inappropriate use of that phrase, and laden with several, substantial and entirely unnecessary risks.

Also, while I dedicate much of my life to improving the world we live in, I also recognize that it is almost always unwise to create or accept unnecessary risks in doing so. My view is that it is 100% unnecessary, unwise and potentially hazardous to your job, your career and your reputation to request a “mental health day” at work, as well as, in itself, a touch dishonest. So, “Just Don’t Do It.”

WHAT YOU CAN DO: Instead, let’s just deal with the issue before us: feeling angry, spent, cranky, even on the verge of tears? Not sure you will be able to hold onto your temper if you go to work? Ready to explode at a work colleague? I get it; I’ve been there. But in such events, I strongly urge you to never, ever ask for a “mental health day” at work. Here are my thoughts:
Read the rest of this blog post »

Question: Dear Alan: I do all my work from home. This requires that a great part of my communications with my customers, my coworkers and my employer have to be over the internet.

Do I have a right to be reimbursed by my employer for my monthly internet expenses?

Liselle
Ipswich, Massachusetts

Answer: Dear Liselle: Your question is very common, as more and more people engage in home-based work, often called “telecommuting,” and use a variety of technologies to do so. People who use their cell phones for work are in the same “boat” as you are. Here’s my answer:
Read the rest of this blog post »

“ Once you get that two-way energy thing going,
everyone benefits hugely.”

– James Taylor

ACTUAL “CASE HISTORY”: Retaining the best employees is a crucial part of business success today. But, at the same time, keeping employee-related costs down is also a matter of business survival in the hyper-competitive world we live in. What’s an employer to do? Many have turned to providing unusual perquisites (commonly called “perks.”)

Following World War II, when soldiers returned from war eager to form families, buy houses and drive cars, there resulted a shortage of labor to build, construct and manufacture what people wanted to buy, own and consume. So employers came up with the idea of “job benefits” in an effort to attract and retain employees. That is how employer-provided health insurance, disability insurance, life insurance, paid vacation days and retirement benefits, just to name a few, came to be commonly expected employment “benefits.”

The word “perquisite” – or “perk,” for short – means “a gratuity, privilege or right of employment that is incidental to usual compensation.” Some might call them “mini-benefits,” because they are not as costly to employers, and do not seem as valuable to employees in comparison with such things as health insurance, pensions and life insurance.

In today’s competition for the best employees, employers are coming up with new, different, and unusual ways to attract and retain those who seem to be “the best and the brightest.” Your employer just might offer certain job “perks” that you may not be aware of.

According to a recently published report, these are some employer-provided perks you may have a hard time believing:
Read the rest of this blog post »

“The real difference between death and taxes is that death doesn’t get worse every time Congress meets.”

– Will Rogers

ACTUAL “CASE HISTORY”: Just yesterday, Jay, a long-time client, called. He asked me a question I am asked a lot: “Hey, Al . . . I have asked my boss for a raise, but he said that he can’t right now. He said, though, that if I was interested, he would consider “tax-free perk’s,” instead. Any idea of what he is talking about? Is that legal?”

Jay seems to be facing what a lot of people are facing these days: it’s getting harder to “make ends meet” and employers are very reluctant to significant raises, if any at all. Instead, many employers are offering tax-free fringe benefits (“perquisites,” or more commonly, “perks,” for short.), instead, either by offering them to certain individuals who are deemed particularly deserving of them, or to all employees in a structured fringe benefit plan.

Showing employees they are appreciated, and keeping costs under control, are both big parts of successfully running a business.

LESSON TO LEARN: Pretty much everyone knows that employers can pay for employees’ health insurance and life insurance as a tax-free benefits, but beyond those two, and a few others, most people don’t know of the many tax-free perks employers can provide employees under US. law.

Since such tax-free fringe benefits are treated by the IRS as both (a) entirely valid business expenses to employers, yet (b) also tax-free “rewards” to employees, it makes offering them doubly attractive from both employer and employee perspectives.

While I am not a tax lawyer, and cannot provide tax-related advice, I do suggest you (a) consider the value that such tax-free fringe benefits may be to you, and (b) confirm with your tax advisor or personal accountant that, indeed, they would be tax-free to you, as whether you qualify of some of these non-taxed perks does require attention to detail. (Indeed, the amount of tax-free benefit under several of these benefits changes from year to year.) Then, if it makes sense in your situation, consider raising the request for one or more of these to your employer.

If you can get better “rewarded” by your employer, and have no greater a tax bill, what could be so bad?

WHAT YOU CAN DO: Here are ten tax-free employment “fringe benefits” that might make sense for you, and to your employer:
Read the rest of this blog post »