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Tax Question regarding Vehicle Allowance
Posted on 3/18/15 at 2:46 pm
Posted on 3/18/15 at 2:46 pm
A friend of mine received a 1099-Misc from his old company for a vehicle allowance that he received for being a salesman. He also received a W-2 for his actual wages. I thought that as an employee, the allowance should go on the W-2. Can someone give some guidance on where to file this? Would it go under the Schedule C or would it go under line 21? Also, are their deductions to take to offset the income such as vehicle and mileage?
The income was reported on Box 3 under other income.
The income was reported on Box 3 under other income.
3
Posted on 3/18/15 at 7:14 pm to LSU1018
I have been getting the same the past 9 years and this year it's not showing up in the same cells on turbo tax as past years.
I get a 1099-misc with the allowance in 3-other
Normally I right off the additional cost of car insurance I need to carry, mileage, oil changes, tires, ect to offset the allowance.
I get a 1099-misc with the allowance in 3-other
Normally I right off the additional cost of car insurance I need to carry, mileage, oil changes, tires, ect to offset the allowance.
Posted on 3/18/15 at 7:30 pm to tigeraddict
My understanding is that if you get an allowance that is non-taxed (1099) then you cannot write off expenses on your tax return as it is an accountable plan. The only time (in my understanding) that you can write off vehicle expenses is if the allowance is taxed.
I'm sure someone will arrive to clarify or correct me.
I'm sure someone will arrive to clarify or correct me.
Posted on 3/18/15 at 9:00 pm to LSU1018
Report the amount as a reimbursement on Line 7 of Form 2106.
Posted on 3/18/15 at 11:07 pm to Poodlebrain
Thanks for the help!
Posted on 3/19/15 at 8:42 am to LSU1018
quote:
I thought that as an employee, the allowance should go on the W-2.
Yes, that's how it's supposed to be. In real life, most companies do a 1099. Most companies don't share this information with their payroll providers.
Posted on 3/19/15 at 3:49 pm to LSUFanHouston
This is one of those situations where the cost of administering the policy exceeds the benefit of doing so. Instead of strictly complying with the law and regulations businesses achieve the exact same result with less hassle by reporting the allowance on a 1099-Misc instead of on a W-2. It is a great example of substantial compliance instead of strict compliance.
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