I have question as related to taxes. I don't know if it's relavent to the questions but I live in Florida
and due to COVID-19 started working from home. Is it possible for an employer paying somebody working
from home such as I to pay job related bills such as the Internet bill or electric bill where the employee
doesn't get taxed for these payments to these bills?
Also, could that same employer if doing this for more than one employee use this as a tax write off?
Thanks in advanced for the answers.
Yes. the employer has to establish an accountable business expense reimbursement plan where the employee submits receipts for the business expenses and is reimbursed by the company. The company can deduct these reimbursements as a business expense.
On the other hand, if the company just gives you a sum of money each month to offset your expenses, that money is part of your taxable income and you do not get to deduct any of your expenses (thank TCJA for that change).
The preceding is overly simplified, you can learn more in IRS Pub. 535, Business Expenses,
In general, if you incur expenses you incur for the convenience of
your employer, and your employer reimburses you, you do not pay tax
on that money but your employer treats it as a regular business
expense. The classic example is when your employer sends you on a
trip and reimburses you for airfare, hotel, meals, and so forth.
However, that principle can be tricky to apply in the context of an
employee's home, because you have to pay for utilities whether you
work at home or not.
Why not just ask your employer whether the payments they are making
to you will be included on your W-2? They are in a better position to
know the little nuances of the payments that will determine that
people on a newsgroup. If the payments will be in your W-2, then
you'll have to pay tax on them; if they're not, you won't.
The number of employees doesn't matter. When an employer reimburses
employees for business expenses, the employee doesn't pay tax or get
a deduction. The employer includes the money in _its_ business
expenses, which will indeed reduce the employer's taxes.