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.
You receive imputed income on the SWAG points. (Not the buddy passes). Whatever you then buy with the points has no effect on the taxes.
If you received $700 for the year and your tax rate is 25% then it will add 700 x 25% or $175 to your federal tax bill. So you are paying (in this example) $175 for all the SWAG points you received for the year. That $175 is the cost of all your buddy passes, gift cards, etc for the year.
What you then do with the points has no further tax implications whether you buy buddy passes, gift cards, etc.