Imputed Income Examples?

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22-Oct-2016, 10:13 AM
Morpho

Imputed Income Examples?

Can anybody give real-world examples of how much they get charged for imputed income for flights? Basically - from what I've read on this forum and elsewhere - the formula seems to generally be approximately 30% of the "Inputed Income" amount supplied by American Airlines on JetNet - is that correct?

-So for example if a flight from Chicago ORD to Beijing PEK lists $180 for "Inputed Income" in the NRSA on JetNet that means that the employee is effectively / likely going to be charged 30% of $180 = $54. Is that right?
22-Oct-2016, 10:29 PM
spongebue

Ultimately, it depends on your individual tax situation, but that sounds reasonably close to being correct. Obviously, you're not being paid to have someone fly in a situation where imputed income would be charged, but the IRS sees that as a taxable benefit. So if you normally make $600 in a paycheck, and your tax rate is 30%, you will be taxed $180 and take home $420. If you add in $180 in imputed income, the IRS will tax you as if you made $780 - deducting $234 on what is really a $600 paycheck leaving you with $366. The difference in take-home pay in those two scenarios is, you guessed it, $54.

But again, that all depends on your tax rates. You could fall into a different income bracket or something. I'm not an accountant. But in my experience, yes, 30% of imputed income is a good rule of thumb.
23-Oct-2016, 04:13 PM
Morpho

Quote:

Originally Posted by spongebue

Ultimately, it depends on your individual tax situation, but that sounds reasonably close to being correct. Obviously, you're not being paid to have someone fly in a situation where imputed income would be charged, but the IRS sees that as a taxable benefit. So if you normally make $600 in a paycheck, and your tax rate is 30%, you will be taxed $180 and take home $420. If you add in $180 in imputed income, the IRS will tax you as if you made $780 - deducting $234 on what is really a $600 paycheck leaving you with $366. The difference in take-home pay in those two scenarios is, you guessed it, $54.

But again, that all depends on your tax rates. You could fall into a different income bracket or something. I'm not an accountant. But in my experience, yes, 30% of imputed income is a good rule of thumb.

Thanks so much - that's exactly what I wanted to know. I'm actually the Registered Companion of an AA employee - so want to make sure I cover his costs entirely.