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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3591
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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My husband just started a super job the salary is 37,440.00

Customer Question

my husband just started a super job the salary is 37,440.00 per year but the apartment is on his contract list 19,800 per year taxable to him what does that actually cost him and is it worth it
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: his total employment package offer 61940.00 but only 37440.00 is actual salary
JA: Is there anything else the Accountant should be aware of?
Customer: no
Submitted: 4 months ago.
Category: Tax
Customer: replied 4 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 4 months ago.

I'm at library and have to go can you call me at XXXXXXXXX cell number with the response to my question thanks so much

Expert:  Robin D. replied 4 months ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  Robin D. replied 4 months ago.

The apartment cost is taxable to him because it is not a benefit that can be excluded from his pay nor can he use the additional income as an expense (he cannot deduct the apartment cost). That would place you and he in the 15% tax bracket so he pays 15% tax on the additional income.
​If this was a temposrary location he had to work in then the expense could be deducted but as this is his new work place it is not.

Expert:  Barbara replied 4 months ago.

Different expert here - my name is ***** ***** I have a different answer.

When an employer provides housing or lodging for an employee, the employee may be able to exclude the value of the lodging from gross income. The lodging must meet three tests under Regs. Sec. 1.119-1(b): (1) The lodging must be on the employer's business premises; (2) the employer must provide the lodging for the employer's convenience rather than for the employee's convenience; and (3) the employer must require the employee to accept the lodging as a condition of employment. Thus, the employee must need to live in the lodging to be able to perform the duties of the employment.

Example 5: J is an employee of an apartment building, performing maintenance and repairs. His employer requires him to live in the apartments to be able to provide emergency repair services 24 hours per day and therefore provides J with free lodging there.

J meets all three tests: (1) The lodging is on the employer's premises; (2) it is for the employer's convenience; and (3) J must live there to be on call 24 hours a day as a condition of his employment. Therefore, he may exclude the value of the free lodging from gross income.

FOR THE EMPLOYER'S CONVENIENCE

Sec. 119(b) specifies that the terms of an employment contract or state statutes that describe terms of employment are not determinative of whether meals or lodging are for the employer's convenience. If a state statute or employment contract treats employer-provided lodging as compensation, the employee may still exclude the value of the lodging from gross income for federal income tax purposes if the lodging meets the three tests. The employee must determine whether he or she may exclude the value of lodging from gross income by an objective analysis of all relevant facts and circumstances.

http://www.journalofaccountancy.com/issues/2015/jul/exclude-employer-provided-meals-and-lodging.html

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Expert:  Barbara replied 4 months ago.

Just following up with you to see if you have any other questions or concerns. If so, please let me know.

Thank you.