Ava is a filing clerk at a large insurance company. She is permitted to leave the premises for lunch, but she usually eats in the company's cafeteria because it is quick and she is on a tight...

Ava is a filing clerk at a large insurance company. She is permitted to leave the premises for lunch, but she usually eats in the company's cafeteria because it is quick and she is on a tight schedule. On average, she pays $2 for a lunch that would cost $12 at a restaurant. However, if the prices in the cafeteria were not so low and the food was not so delicious, she would probably bring her lunch at a cost of $3 per day.

Ava's meals are provided as what? Therefore, Ava would include how much per meal in her gross income?

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boomer-sooner | College Teacher | (Level 1) Associate Educator

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     The answer may vary depending on the operating country under which the employee, Ava, is required to file her tax report. In the United States, she would be required to include $10 per meal (given the above example) gross income. If Ava brings her lunch, she does not need to claim any additional amount because she is not participating in the voluntary benefit. To properly calculate the annual gross income Ava should count the number of meals and multiply by the discount. For example, if she ate 200 meals at a discount of $10 per meal, she would report $2000 gross income (200 x 10 = 2000). The regulations controlling this are found in Title 26 United States Code Section 1.119-1(a)(3).  This is often termed a selected benefit or voluntary benefit.  There are many ways she might avoid reporting the gross income, but there is not enough information in the given example to support the argument. 

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