Ask a CPA

As an employer, you must ensure that the total tip income reported to you during any pay period is, at a minimum, equal to 8% of your total receipts for that period.
In calculating 8% of total receipts, you do not include nonallocable receipts. Nonallocable receipts are defined as receipts for carry out sales and receipts with a service charge added of 10% or more.
When the total reported to you is less than 8%, you must allocate the difference between the actual tip income reported and 8% of gross receipts.
Employers can request a lower rate (but not lower than 2%) for tip allocation purposes by submitting an application to the IRS.
Detailed instructions for computing allocation of tips, reporting allocated tips to employees, and for requesting a lower rate can be found in the Instructions for Form 8027. (http://www.irs.gov/pub/irs-pdf/f8027.pdf).
Speak to your local CPA about the requirements of Tip Income reporting.

Employers who operate large food or beverage establishments must file Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips to report employee tip income.
A large food or beverage establishment is defined as business where all of the following apply:
Food or beverage is provided for consumption on the premises
Tipping is a customary practice
More than 10 employees, who work more than 80 hours, were normally employed on a typical business day during the preceding calendar year.
A worksheet for determining whether a business meets the criteria listed above is included in the Instructions for Form 8027. (http://www.irs.gov/pub/irs-pdf/f8027.pdf).

The employer reports the allocated tips in Box 8 of the employee's Form W-2; the allocated tips are not included in Box 1 as taxable wages.
The employee must include the tip amount in Box 8, as wage income on Form 1040, Line 7 and also enter the amount on Form 4137 to determine the employee's share of the FICA tax liability.

If Chauffer services are provided for both personal and business purposes, the costs of the personal use are considered taxable income.

The use of a company car is tax free to the extent you use the car for business.
If you use the vehicle for personal use your employer has the resposibility of calculating taxable income to you.
You are required to maintain records such as a mileage log to document and substantiate your business use.
You are not sunject to additional taxable income if your vehicle is considered a limited personal use vehicle.
Llimited personal use vehicles include garbage, dump, flatbed or refrigerated trucks, hearses or ambulances, one passenger delivery trucks, police, fire or public safety vehicles, school and passenger buses and farm vehicles

The employer must report as income in Box 1 of Form W-2, (a) the discount portion of stock acquired by the exercise of an employee stock purchase plan option upon disposition of the stock, and (b) the spread (between the exercise price and the fair market value of the stock at the time of exercise) upon a disqualifying disposition of stock acquired by the exercise of an incentive stock option or an employee stock purchase plan option.
An employer must report the excess of the fair market value of stock received upon exercise of a nonstatutory stock option over the amount paid for the stock option on Form W-2 in boxes 1, 3 (up to the social security wage base), 5, and in box 12 using the code “V"
For more information about employee stock options, Speak to your local CPA or see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations.

You can exclude the value of a minor cost ( "de minimis") benefit you provide to an employee from the employee's wages.
A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable.
Examples of de minimis benefits include the following. Occasional meal money and taxi fares for overtime work.
Transportation fare.
Occasional parties or picnics for employees and their guests.
Occasional tickets for theater or sporting events.
Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes.
Holiday gifts, other than cash, with a low fair market value.
Group-term life insurance payable on the death of an employee's spouse or dependent if the face amount is not more than $2,000.

An employer can exclude the value of an employee's use of an On-Premises gym (or property leased by the employer, not necessarily located on the main business premises) or other athletic facility you operate from an employee's wages if substantially all use of the facility during the calendar year is by your employees, their spouses, and their dependent children.
Athletic facilities include gyms, golf courses, tennis courts, swimming pools.
The facilities must be available to all employees on a nondiscriminatory basis.

Generally, the cost of driving to work in a commuter highway vehicle between the employee's home and work place, employer provided parking, transit passes, bicycle commuting reimbursements are tax free.
You can generally exclude the value of transportation benefits that you provide to an employee during 2013 from the employee's wages up to the following limits.
$245 per month for combined commuter highway vehicle transportation and transit passes. ($240 in 2012)
$245 per month for qualified parking. ($240 in 2012)
For a calendar year, $20 multiplied by the number of qualified bicycle commuting months during that year for qualified bicycle commuting reimbursement of expenses incurred during the year.

Be sure to include the portion of your annual maintenance fee assessment for a time-share condo, which represents your share of the property’s real estate taxes.
This amount should be identified on your annual billing statement.