Fringe benefits: Watch your P’s and Q’s

As an owner of the company, you’re probably entitled to your fair share of perks (p’s) and qualified benefits (q’s). Generally, the perks you receive, which are not available to other employees, are taxable as compensation. However, qualified bennies offered to the entire workforce are generally tax-free.

Here’s a quick rundown (in alphabetical order) of some common fringe benefits that are usually tax-free at the time you get them (within limits):

  • Cafeteria plans
  • Child care assistance
  • Company car
  • Educational assistance
  • Employee discounts
  • Free parking
  • Group term life insurance
  • Health insurance
  • Incentive stock options
  • Reimbursed travel expenses
  • Retirement plan contributions
  • Transit passes
  • Working condition fringe benefits

Tip: This list is by no means all-inclusive. In addition, tax-free fringe benefits are subject to special rules, limitations and exceptions. Observe all the tax rules year-round to preserve tax-free status.