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The problem was that your question said Evans "reimbursed" employees for the tickets; he did not reimburse them, he paid them with office funds. You've got several people here who have pointed out your errors on tax law, yet you've failed to acknowledge or respond to their specific references to IRS guides.

I've responded multiple times, but I'm happy to respond again.

First, when an employer reimburses a parking fine, that's taxable income. There are a couple IRS publications that state this clearly, but here is the one I linked to earlier. This publication lists deductions that you can make from your income on your 1040, like unreimbursed employee expenses. It then lists non-deductible expenses, and says this:

You cannot deduct fines or penalties you pay to a governmental unit for violating a law. This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike.

Second, many commenters insist that if an employer pays for something on an employee's behalf instead of paying them directly, that that somehow gets around laws on taxable income. It doesn't, and if it did employers would be paying their employees rent and reducing their salaries accordingly.

Third, many commenters insist that if an employer pays them from an account other than their employer's checking account, that somehow that gets around laws on taxable income. It doesn't.

by Ken Archer on Aug 25, 2011 11:21 pm • link • report