Quote:
Originally Posted by Electrician4you
A advance is still payroll. But with a screen name like yours I sort of expect you not having a idea
That's funny. Because when I OWNED my own company and had to do payroll I had employees asking for advances. I used to just do it cash and then give a note to the payroll lady. But after she blew a gasket and told me "You can't do that" I learned otherwise. A advance on your payroll gets taxes taken out. It's not a loan, it's a advance on payroll.
|
I've also done payroll, and a long time ago I took a large advance to buy a house, so I'm familiar with this transaction.
The advance is legally a loan, and is not subject to mandatory tax withholding although the employer may choose to make the loan only if tax is withheld (please bear with me).
The loan becomes taxable income if the loan is forgiven, but since most employees don't have the cash to pay taxes on the non-cash loan forgiveness, it is to the employee's advantage to have the tax withheld when the loan is made instead, and some employers won't make the loan without the withholding.
If you don't think it's a loan, try not paying it back!
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
