The tax ins and outs of employee fringe benefits
Abstract: So-called “fringe” benefits can actually be a significant component of compensation and a tool for attracting, motivating and retaining talented employees. But the tax treatment of fringe benefits is complex and often misunderstood. To avoid unpleasant tax surprises, it’s important for employers and employees alike to familiarize themselves with the rules. This article discusses the tax treatment of benefits for owner-employers, depending on their company’s business structure, and warns to look out for family attribution rules. A sidebar offers specific examples of tax-free fringe benefits.