Question

Taylor works for a shoe store in the mall. he earned $25,000 in wages during the year. also, because the store had a cash flow problem in june, taylor did not receive his $500 weekly check but instead was given a credit of $500 on the purchase of shoes for himself and his family. how much income should be shown in box 1 of his form w-2 and reported on his tax return as wages?

Answer 1

In box 1 of his w-2 form he should put $24,500 and as his wages as $500 of the $25,000 was store credit. Though he should make sure the store credit doesn't become a more permanent option as you can't use them to pay bills.