Imputed Income in Quickbooks

[Burke]

Employee is furnished car by employer. Imputed income for FMV of leased vehicle is added to employee's W-2. Does not qualify for any exceptions. This is taxable for FIT, FICA & state taxes. Is there any way to include this imputed income in each paycheck for withholding purposes and not have the system actually issue a check for the imputed amount? It needs to go on the 941 each quarter and the W-2 at the end of the year.

[Maribeth]

There has to be a credit for every debit. The IRS can mandate that certain phantom items be included on a W-2, but on the books there must be a debit and a credit.

For your paycheck, the income would be included as a category of "auto reimb" or something similar. That's your debit to wage expense.

Then there would be a deduction on the paycheck for an "advance" or something similar. That advance would be credited to a contra-salary expense account, or you could even credit it to the automobile expense account. That way your auto expense is net of the amount that was transferred to your employee's wages.

hth

[Burke]

Thanks. I would have to create some other kind of account. I can't credit it to Auto Expense since the SCorp deducts the actual expense for leasing the auto. They don't write off the imputed income as compensation that goes on the W-2, which is phantom. And while the two amounts are close the first year because of the upfront payment, for the following years they are very different.