Lodging/employer

[TAX4US]

Landscaper (sch C) provides housing for 2 employees(not on his property but in a different town 20 miles away) .
Employees sometimes keeps business trucks at this location in order to be on job sites early or have to repair them.

Question now is what do we do with this so called rent not being paid or FMV of housing not showing up on W-2? Landscaper is not showing rent on tax return. Mortgage co saying W-2 not high enough or this number not showing up in other box, or Employee pays no rent.

Employees pay all utilities at this location. I think if we treat this as other income on return and pay the SS/MT employee may be ok. I think employer may have a real problem if he tries to deduct this as other iexpense. I still think employer may be withholding rent amount and then calculating tax. Can't be sure as employer doesn't appear to be doing this on the paystubs. May be employer is holding off hours to compensate for the rent and then paying employees.

Any thoughts on how to handle W-2 or fix employees tax return. I may be asked to prepare W-2's for company and want no rats in the woodpile.

Thanks for any imput.

[TAX4US]

I found out employer is withholding hours to make rent numbers. So if Employee reports this amount on other income and pays SS/MT on SE do you think tp would be OK. Sounds to me like bartering and not for emplyers convience. Thanks if you can respond.

[DaveO]

Sounds like bartering to me. The total pay should be on W-2 and the employee paying rent to the employer. As you say it's not for the employer's benefit so it can't be tax free to the employee.

I used to work for a publishing company and lived and worked for months at a time in various locations. I was required to accept the lodging provided by my employer. As a rule it was pretty nice, so no great hardship, but not income to me either.

[Gary2]

I'm just not understanding all the issues. In the base note, you mention preparing the W-2s, but then in the followup, you talk about how the employee will report things.

So let's start with the basics: Who is your client, the employer, employee, or both? If both, then pick one to start with, and ask the questions for that person before dealing with the other person's questions.

Next, what is the question? How to prepare a W-2? Is the lodging taxable? What can the employer deduct?

Then what are the facts relevant to the particular question? Why is the mortgage company involved, and who are they to say whether or not the numbers on the W-2 are correct? When you say the landscaper isn't showing rent on a tax return, do you mean prior year? A corporate return with a different fiscal year? Rent from whom? Why is it being in a different town relevant?

What do you mean "withholding hours"? To me, that means saying "I'm only going to put you on the schedule for 20 hours this week, because I'm saving the other 20 for a different employee." Do you mean the employer is withholding wages on the paycheck by not paying the employees for the number of hours they worked?

There are too many points being written without the relevancy or actors being made clear, and not enough of the obvious facts that would be relevant (such as why are they doing this; how do the trucks on site figure into the relationship between employer and employee; and whose side are you on?).