Do you find yourself often burning the midnight oil at the office? It takes long hours and hard work to make a business a success.
Strategy: At least you can salvage some tax fruits from your labor. Here are three common options.
1. Free parking. If you work past regular hours, you may incur additional charges for parking your car in a lot or garage. The tax law allows your company to provide a monthly benefit of up to $240 in 2013 without any tax consequences. If you exceed the monthly allowance due to the late hours, the company can reimburse you tax-free as a “working condition”
2. Cab fare. Similarly, you may need to take a cab ride home late at night instead of using public transportation. If your company reimburses you for the fare, the reimbursement is typically tax-free, as long as you don’t make it a regular habit. But if you’re taking a cab home due to safety concerns or because your employer requested that you work late, the reimbursement is tax-free to the extent it exceeds $1.50 for a one-way trip.
3. Supper money. If you work late, you might “order in” from a local restaurant. The cost of the meal, including any delivery charge and tip, is tax-free if you chow down only occasionally.
Tip: The tax law allows these tax-free benefits even if you own the business.