Business Finance
In the Real Word

Question Description

I’m trying to learn for my Accounting class and I’m stuck. Can you help?

Discussion Topic: In the Real Word: Scenario for Discussion

Motor vehicle services technicians usually must provide their own tools as part of their employment. These tools are the property of the technician, and service technicians generally receive an hourly wage. Some automobile dealerships split service technician wages into classifications such as tool reimbursements and wages. The result of this practice is that workers’ hours are taxed and the tool reimbursements are not because they are classified as a business expense.

Should the tool reimbursement be treated as income on the service technicians W-2? Why or why not? What are some implications of this practice?

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Final Answer

Hi, kindly find attached


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Technicians in motor vehicle services are required to come along with their tools after
they are employed. In this regard, the technicians are paid on an hourly basis. Motor vehicle
dealers usually separate technician wages into wages and tool reimbursement. The wages are
taxed while tool reimbursements are not since they are an expense to the business enterprise.
This paper will analyze and discuss why tool reimbursement should never be treated as ...

NicholasI (29605)
UT Austin

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