This may be more of a CPA question, but wanted to see what others are doing.
My manager is receiving free housing and I also pay when they rent a house or a new home moves in. So I do payroll for the extra items they get a check for, so that is easy. But how do you report / record the housing amount? Or do you not? I use quicken so maybe it does it and I just haven’t figured that out.
I’m not a CPA but a 30+ year business owner. I can tell you that in this case you need to report the fair market value of the free housing via a 1099 and the same for the other payments. Be sure to let the manager know you will be doing this. I had an employee working evenings for cash and when the 1099 came in she wasn’t prepared for the impact it had on her tax return. The general rule is they should set aside 25% but a safer route in this day and age is to just inform them that you are required by law to report the income and free housing at FMV and that they should talk with their tax adviser on how this may impact their tax situation.