Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I employ janitors that work at grocery stores in California.

Customer Question
When i come on site...
I employ janitors that work at grocery stores in California. When i come on site to work on special projects or check on things (about once a week), i like to provide some snacks as a way of promoting good morale (like fruit in season, candy).I had read in the past that providing food to employees can result in them needing to pay tax on this. So i have been paying for the snacks personally. Can you confirm if there is any acceptable way for a business to provide food or snacks without negative tax consequences to either party?
Submitted: 3 months ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 5 minutes by:
3/21/2018
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 months ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,756
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified

Hello. Thank you for choosing this Q&A service for assistance. My name is***** will be assisting you. I am prepping my response, which I will provide to you in the next thread(s).

----------------------------

Note that telephone call and other solicitations are automatically generated by the site, not the experts. If you are not interested in an offer, simply decline.

Still typing...

Ask Your Own Tax Question
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 months ago

In general, providing meals to employees is considered a fringe benefit and is taxable to the employee. The only way that the meal would not be taxable to the employee is if the snacks were served on your business premises. SEE BELOW:

------------------------------

For an employee to exclude the value of meals received from an employer from gross income under the general exclusion in Sec. 119(a), the employer must furnish the meals on the employer's business premises. The "employer's business premises" generally means the employee's place of employment. The business premises include the place where the employee performs significant duties or where the employer conducts a significant portion of its business. Places near the employer's premises will not qualify, even though those places might be convenient. The business premises of the employer include any place on the grounds of the employer and not just the main structure. The meals must also be for the convenience of the employer, not the convenience of the employee.

REFERENCE SOURCE:

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

-----------------------------

In closing, my goal is to provide you with the best experience possible! Hopefully, the service that I have provided has earned a 5-star rating! Please remember to rate my service by selecting the 5 stars at the top of the screen before you leave today. Thank you in advance. If you require further assistance, use the reply box and let me know.

Ask Your Own Tax Question
Customer reply replied 3 months ago
Ok, i read the article you sent, and have two follow-up questions:
1) since my customers location (the grocery store) is where my employees work, that would be considered the business premises, right? Since i don't have any other premises where they work for me.
2) the webpage you sent mentioned:
"An employee may exclude from gross income the value of small food items and soft drinks as a de minimis fringe benefit. In addition, an employee may exclude from gross income occasional meals provided in kind or occasional cash received to buy dinner to allow the employee to work overtime. The same treatment may be extended to food and drinks provided by the employer to employees and their guests at picnics and parties." What makes something a de minimis benefit? If i share small snacks and items once per week, like fruit and candy that i mentioned, would that qualify as being excluded from the employee's gross income?
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 months ago

A1: No, as you are the employer, it has to be YOUR business premises.

A2: I will check on the de minimis benefit and get back to you.

Ask Your Own Tax Question
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 months ago

In general, a de minimis benefit is one for which, considering its value and the frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical. De minimis benefits are excluded under Internal Revenue Code section 132(a)(4) and include items which are not specifically excluded under other sections of the Code. These include such items as:

  • Controlled, occasional employee use of photocopier

  • Occasional snacks, coffee, doughnuts, etc.

  • Occasional tickets for entertainment events

  • Holiday gifts

  • Occasional meal money or transportation expense for working overtime

  • Group-term life insurance for employee spouse or dependent with face value not more than $2,000

  • Flowers, fruit, books, etc., provided under special circumstances

  • Personal use of a cell phone provided by an employer primarily for business purposes

In determining whether a benefit is de minimis, you should always consider its frequency and its value. An essential element of a de minimis benefit is that it is occasional or unusual in frequency. It also must not be a form of disguised compensation.

Whether an item or service is de minimis depends on all the facts and circumstances. In addition, if a benefit is too large to be considered de minimis, the entire value of the benefit is taxable to the employee, not just the excess over a designated de minimis amount. The IRS has ruled previously in a particular case that items with a value exceeding $100 could not be considered de minimis, even under unusual circumstances.

REFERENCE SOURCE:

https://www.irs.gov/government-entities/federal-state-local-governments/de-minimis-fringe-benefits

Ask Your Own Tax Question
Customer reply replied 3 months ago
Ok, so if i understand correctly, my business can't provide any kind of snacks to my employees without tax consequences to them under the "employer premises" provision, but it can do so under the "de minimis" provision, so long as it fits with the definition of de minimis. "Occasional" has been defined as "infrequently or irregularly". Thus, once per week would not qualify as de minimis, even though the value is small, it is too frequent. It would have to be "once in awhile", practically unplanned, to qualify. Does that sound correct?The interesting thing is, the snacks are a truly unnecessary benefit and i know my employees would not choose to receive these snacks if they had to count them as income. So, essentially, this law stifles generosity and kindness. Or rather, it forces me as an individual to use my personal money for a business purpose. I guess nothing has changed.
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 months ago

Your thought pattern is correct, once a week would not be considered occasional. Are your providing the snacks for a business benefit or to be kind? The law doesn't stifle your generosity and kindness, you're just not able to benefit from the generosity and kindness. Respectfully, ***** ***** are truly providing these snacks to be generous and kind, spending your personal funds shouldn't be an issue.

Ask Your Own Tax Question
Customer reply replied 3 months ago
Providing snacks to employees is something I like to do out of kindness, but as i mentioned at the outset, it also has a business purpose of "promoting good morale". It would be an oversimplification to state that such an action is done either out of kindness or for a business purpose, like many things in life, it is a combination of both. The reason I have been spending my own money to do this, rather than say forget it, is because i don't mind doing so. However, in my point of view, it should be perfectly acceptable for a business (which is viewed as a "person", a separate entity in the eyes of the law), to do the same thing so long as it is not an "alternate way" to pay wages to employees or an "excuse" to pay them less, something only a shady business would do. I see nothing wrong with the business being allowed to use a very small portion of its resources to give to its workers without tax consequences. Businesses can conduct meetings with clients over a meal and count it as a deduction, even if it's not because of being generous but it simply benefits the business, can they not? Why have businesses become restrained from doing the same with its own employees? Essentially, showing hospitality has become a "privilege" extended only to humans, and business entities are discouraged from showing it. Since there is a component of business interest in providing snacks, saying that business owners and managers should feel free to spend personal money on employees, is asking individuals to use personal money for business purposes. It would be better i think, for the law to encourage business management to use company resources in a way that promotes a generous and happy spirit among its workers. I simply cannot fathom the purpose of making employees pay tax on snacks given to them, as no one wants to keep track of something like that. Nevertheless, we have no control over the way laws are written....
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 months ago

I understand and agree with your point of view, but the tax laws are what they are and as you wrote, we have no control over how they are written.

Ask Your Own Tax Question
Customer reply replied 3 months ago
I researched further about what is considered the "business premises" and the definition i saw on this irs website ( https://taxmap.irs.gov/taxmap/pubs/p15b-001.htm#TXMP656c685b ) is that it means the place where the employees perform their work. So it looks like the grocery store would be considered my business' "business premise" after all.However, the webpage also specifically mentioned that meals that "promote morale" are not excluded from taxation.I have a follow-up question regarding business meetings with employees. Can i provide snacks as part of a safety or other meeting with the employees? Can i have such meetings on a regular basis?I'd like to get another viewpoint on this topic, could i open this question up to another expert?
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 months ago

You can ask for a second opinion.

Ask Your Own Tax Question
Customer reply replied 3 months ago
I don't see an menu option for this, is there something specific i need to do for that?
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 months ago

I'm not sure how that works either. However, I have seen questions posted where people have asked for second opinions.

Ask Your Own Tax Question
Customer reply replied 3 months ago
Just answer says, "you can ask the Expert to opt out of the question and open it to other Experts". Could you find out how to do that?
Tax Professional: Tax.appeal.168, Tax Accountant replied 3 months ago

I just received an email yesterday about opting out of questions, and that I should not do that unless necessary. However, I will opt out as it is per your request for me to do so.

Ask Your Own Tax Question
Tax Professional: Barbara, Enrolled Agent replied 3 months ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,374
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
Verified

Different expert here - my name is ***** ***** I will be happy to assist you.

As you already know,

In general, a de minimis benefit is one for which, considering its value and the frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical. De minimis benefits are excluded under Internal Revenue Code section 132(a)(4) and include items which are not specifically excluded under other sections of the Code.

The IRS has ruled previously in a particular case that items with a value exceeding $100 could not be considered de minimis, even under unusual circumstances.

Meals are excludable from wages of the employee if they are provided:  on the employer's business premises; and  for the employer's convenience. Providing meals at safety or other meetings with your employees is not taxable to the employees.

See the following: https://www.irs.gov/pub/irs-pdf/p5137.pdf

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Barbara Your Own Question
Barbara
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,374
6,374 Satisfied Customers
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.

Barbara is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I am setting up a online business and I would like to know
I am setting up a online business and I would like to know if taxes are charged on all items? Toys, home décor, games, gifts etc. … read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,465 satisfied customers
Im in the process of opening an online store that sells
Im in the process of opening an online store that sells clothing and outdoor gear. Im waiting for approval on my LLC (S Corp). As of now i have no inventory to sell. Do i only need to worry about payi… read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,465 satisfied customers
Im getting audited this year and one of the requests from
Hi, Im getting audited this year and one of the requests from the IRS was for me to prove head of household. They requested grocery receipts but I do not have any. … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
can i start a business if i live in my parents home which is
can i start a business if i live in my parents home which is owned by a church which is nonprofit?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
A grocery store is offering a coupon for $20 in free groceries
A grocery store is offering a coupon for $20 in free groceries with the purchase of gift cards. If I donate those groceries to the local food shelf, can I reduce my tax liability by each $20 I give? W… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I have a LLC In NY State, Long Island NY. How Do do I know
I have a LLC In NY State, Long Island NY. How Do do I know what taxes I have to pay on both state and federal level. I am in a Baked Goods business. Do I have sales tax as well?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
A question about taxes and travel reimbursement. I have
A question about taxes and travel reimbursement. I have been working on the same project for almost a year, except for 3 weeks of non-work travel on two occasions, and 3 weeks working on a different p… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
hello. I am trying to understand whether I need to collect
hello. I am trying to understand whether I need to collect and pay sales tax on the product I sell online. I looked through the tax code but I am not clear at all… read more
Barbara
Barbara
Enrolled Agent
6,374 satisfied customers
I want to open a WIC in Racine (Women, Infants and Children)...there
I want to open a WIC in Racine (Women, Infants and Children)...there is a home in a perfect location, that I would like to buy and then use the money for rent which the state will do, to pay for the m… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I own a restaurant in Pa [Beaver County ] . The sales tax rate
I own a restaurant in Pa [Beaver County ] . The sales tax rate is 6% . We have a certain amount of food items that are comped each day for managers , owners and possibly mistakes made in food or servi… read more
Tax.appeal.168
Tax.appeal.168
Tax Accountant
4,756 satisfied customers
I have a 2nd on my primary residence with Chase and they are
I have a 2nd on my primary residence with Chase and they are offering to extinguish this loan in it's entirety under the Home Affordable Modification Program (HAMP)/Dodd-Frank. Are there any taxes I w… read more
Tax.appeal.168
Tax.appeal.168
Tax Accountant
4,756 satisfied customers
My wife provides child care for a person who gets public assistance
My wife provides child care for a person who gets public assistance to pay for the child care. How do I report the income and what are the deductions for meals, transportation and overnight stays, and… read more
Stephanie B.
Stephanie B.
Accountant
Master's Degree
451 satisfied customers
I purchase a brand of protien bars called ZONE BARS . Everywhere
I purchase a brand of protien bars called "ZONE BARS". Everywhere I have purchased them I have never been charged tax....except at Von's Grocery store (a division of Safeway). I have talked with the s… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
Our company purchases candy, coffee and drinks that are available
Our company purchases candy, coffee and drinks that are available for customers that visit our office. Is this expense fully deductable or subject to the 50% deductability rule?… read more
TaxMomNJ
TaxMomNJ
Tax Advisor
Associate Degree
242 satisfied customers
I have a small cookie company that I bake out of my ...
I have a small cookie company that I bake out of my house. I have a tax id # XXXXX Do I need to add 8.25% to my customers? I am becoming a regular vendor to a corporation and they are having me fill o… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
We are a vending machine business and could not afford to ...
We are a vending machine business and could not afford to pay sales and use tax for many months. I would like to know that if backed sales taxes negotiable ? Is there any way to get rid of the penalti… read more
Vi
Vi
High School or GED
6 satisfied customers
The irs wants me to send proof of exemptions, filing ...
The irs wants me to send proof of exemptions, filing status, child tax credit, and earned income credit. I lived in my mother in laws home with my two children at the time. If I have her send a letter… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
are meal expenses deductable while working 48 hour paramedic shift
I am a paramedic who works 48 hour shifts at a 911 ambulance, then get 4 days off. I am in a permant job with no forseeable end to my employment. I live and work in the same tax area (county and islan… read more
marty
marty
home remodeler / general contractor
3.5 years of college + night school
78 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x