Forms of compensation

[MRM]

Hi everyone.

From a tax, legal, and ethical standpoint, what can be called, "compensation?"

I'm working part time while in school to bring in enough money, basically, to pay for gas. Let's say I make $300/month on the average.

What if I were to approach my employer (a small engineering firm) and ask for a company gas card in lieu of a paycheck? What are your immediate thoughts about that? Is anyone aware of the cutoffs for compensation?

Or another option: What if I ask them to directly pay my health insurance in lieu of a paycheck?

For the business owners out there, is there any benefit to you as well in either of these scenarios?

As another way to ask this question: How is it decided in any engineering firm that an employee will be paid x dollars per year, and that it is ok from a tax, legal, and ethical standpoint to give them a company car worth $x/year and medical insurance worth $x/year?

 

[ScottyUK]

"After all, since we're already paying about 20% in taxes on a gallon of gas..."

Oh, for that luxury. In the UK 71% of the cost of petrol is tax and duty. 71%, FFS!!


----------------------------------

If we learn from our mistakes I'm getting a great education!

 

[DRC1]

ScottyUK
How much of that goes into transportation infrastructure and how much goes into what we would call the general fund?

 

[ScottyUK]

I'm guessing that the numbers are about 30% and 70% respectively although I can't back that up with hard figures. Anyone else in the UK got any idea?


----------------------------------

If we learn from our mistakes I'm getting a great education!

 

[patprimmer]

The OP still hasn't said where he actually is so it's 90 % sure he's American, however just in case he is not, every country and most states have different tax laws.

No matter where you are, legally arranging things to minimise tax is legal and ethical, but lying or deliberately hiding or disguising income is fraud.

In Aus, part time work as a full time student seldom gets one above our tax free threshold which I think is about $6000 per year.

Regards
Pat
See FAQ731-376 for tips on use of eng-tips by professional engineers &

http://eng-tips.com/market.cfm

for site rules

 

[MRM]

Thanks for the additional thoughts.

I'm indeed all-American. (I may have mentioned in other threads throughout the years that I've lived in Michigan my whole life and am now at U. of Illinois at Urbana-Champaign.)

I'd first like to set the record straight regarding one thing in particular:

I HAVE NO INTENTION OF EVER IN MY LIFE EVADING ANY OF MY LEGAL TAX RESPONSIBILITIES. Perhaps no one has accused me of this directly yet, but that's the general tenor I'm seeing since my May 28 post.

In that post I (tongue in cheek) mentioned that, "money under the table is the only way...my employer would be uncomfortable...I'd be too." I didn't word it correctly though. By "uncomfortable" I meant I WOULD NEVER DO IT. PERIOD.

My next post on May 28th involving ideas for odd jobs was meant to be funny, and not to be taken seriously. At the time, I thought the well thought-out and placed emoticon would signify this.

With that out of the way, I'd like to provide you with an update on my plan, and I’m still open to constructive comments:

In the first couple posts, I mentioned that we own a duplex, which happens to be in Traverse City, Michigan. I also mentioned that because of the rental income (which we actually see none of); Uncle Sam thinks we're pretty well off even though we currently take in only about $15,000 per year with the fellowship; our primary income source. I also mentioned that if my side work (which is and will always be taxed) exceeds a certain amount (which is a fairly small amount), I'm no longer eligible to receive a large portion of my $15,000 financial aid package.

With this being the case, I sought other forms of compensation so that I might provide a little better for my wife and daughter during this time.

The answer became fairly obvious to me a while after I originally posted, however:

I need to sell the duplex, and fast.

Without the duplex, I'd be able to make more money working with my engineer associate, without the big problem of losing my fellowship. Originally, I had hoped to hold onto the duplex as I believe in a good economy it would produce very large profits when we go to sell. However, at this stage it will be a break even prospect. It's the only thing to do though. We need to take the loss.

As a side note regarding my current part-time employment; my employer pays for any general or PL insurance, corporate security taxes (they pay their’s, I pay mine). It’s no different than simply working for someone whether it’s an engineering firm or a McDonalds. Because of this, it’s an easy way to work since I do not need to set any corporate structure up at all…