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Old 04-12-2013, 06:50 PM
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Join Date: Apr 2013
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Household Employee and Gifts?

Hi, this is a question about reporting non-cash gifts from a household employer.

I helped a neighbor move (not my personal business--he asked me) and he paid me an hourly wage, which I suppose makes me a household employee. In total, he paid me $342.50 in cash. Also, as we were going through his belongings, he would find stuff he didn't want anymore and would tell me that I could take it or give it to someone else who could use it (things like clothing and small appliances). If it matters, this was not really from an attitude of compensation, just donation.

I think altogether the value of everything would be less than $1,700. But anyway, does the $1,700 no-W2 limit apply only to wages, or also to non-cash items? How should I report this stuff? And if he bought me meals while we were working, do I have to report that, also? Thanks.



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Old 04-13-2013, 12:10 AM
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“I think altogether the value of everything would be less than $1,700. But anyway, does the $1,700 no-W2 limit apply only to wages, or also to non-cash items?”============>I guess it is just a gift, noncash gifts, for you so you, as a done, do not need to report it as your income; However, if the non-cash "gift" is really a reward for a job well done, or an incentive to do a good job in the future, then the gift becomes taxable.ALSO as the FMV of the stuff is less than $13K for 2013, the donor doesn’t even need to file Form 709.However, cash gifts from employers are always considered taxable income. This includes "cash equivalents" -- items that can be used in place of cash such as gift certificates and gift cards. The reason for this is simple: to prevent both employers and employees from avoiding taxes by dressing up compensation as "gifts."


“ How should I report this stuff? And if he bought me meals while we were working, do I have to report that, also?”=========>No as said above; you neeed to report the compensation of $342.50, NOT a gift, on 1040 line 21 since it is NOT reported on W2, not your salary.



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