If you’re not already using the special accounting rule for fringe benefits, think about your workload at the end of the year and consider it. This rule will allow you to complete one portion of your year-end reporting requirements early and leave you time to enjoy your holidays.
The special accounting rule permits you to treat the taxable non-cash fringe benefits you actually provide during November and December (or any shorter period at year-end) as paid the following year. This allows you to determine the taxable value early enough to include this income on a normal payroll run. You do not have to wait until December 31 to calculate the taxable value of these benefits.
If you have questions about the special accounting rules, see our previous article on this topic or contact a member of our payroll services team.
Elizabeth C. Welhouse, CPP, is a payroll specialist with Schenck. Libby specializes in determining the best payroll processing solutions to fit client needs. She implements new payroll client startups and does payroll software training, along with building and maintaining client exports.