Originally Posted by
rightseat
I have never really understood imputed income related to flight benefits. I am certain I am not the only one. Can anyone explain how this works in layman financial terms?
My example: my benefits include me, my parents and I may soon be adding a significant other. Last year I also used about six or seven buddy passes.
I think my last 2018 pay stub showed about $700 in imputed income.
How can I figure out “about” how much it costs me each time I give out a buddy pass, or when either I or any of the individuals on my benefits (depending on who uses them if that makes a difference). I would really like to get down what the number is after taxes.
I am a second year FO that made about $140k last year. I rarely call in so I have a ton of swag points but I also do not want to be giving away buddy passes if it is going to be costing me a bunch of money. I just really have no idea how it alll works.
Imputed income is a way the IRS collects taxes on a benefit that is given to someone who isn't you, or isn't your collective financially speaking (children and wife for example). What that means is the IRS wants taxes paid upon these benefits. For example: buddy passes, parents, etc.
The way imputed income is calculated varies from airline to airline, but I bet SWA has a table of the "value" of a specific route in monetary terms, and what translates to is, as far as the government is concerned, taxes owed. So you might see an "imputed income" of $100 for a flight, and then under deductions see a 100 dollar post tax deduction. What that essentially means is that you paid income tax on the $100 flight.
Now for actual numbers and such you have to consult your travel department or SWAPA. I know here at NK we have a table with approximate values for a leg and such.