Do you know if salary advance is taxable? How is the salary advanced treated and how is it taxed? Do you know where I can find information on the IRS website?
Andrew Answered question
Two parts to the answer. First, yes, salary advances are taxable like normal salary as they are assessable income for the employee.
In regards to the second question, the tax should be accounted for when the advance is deducted from their salary – say in the next pay period – not when it is paid to the employee. This avoids issues such tax bracket movement and applying the wrong rate.
Andrew Answered question