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Is vehicle allowance considered an income?
Posted on 12/12/14 at 12:58 pm
Posted on 12/12/14 at 12:58 pm
Or is it a reimbursement for the use of your vehicle? Reason I ask is my company was paying me a monthly amount of money for my truck ... They didn't tax it.. Now they're paying me weekly for the vehicle and have it added to my paycheck where as I'm now being taxed...I was always under the assumption it was a reimbursement.where as I'm paying insurance and maintenance... TIA for any info on this.. I'm about to light my boss's phone up and want to get other opinions before I do
4
Posted on 12/12/14 at 1:06 pm to pistolpete23
Posted on 12/12/14 at 1:52 pm to pistolpete23
Mine is, but my allowance is reported my my employer as "rental" income and i get a 1099-MISC (miscellaneous Income) each year showing the allowance
Posted on 12/12/14 at 2:12 pm to pistolpete23
If you are given an allowance - you claim the income and expense when you do you taxes. The only way it is not reportable is if you are getting reimbursed normally mileage and the company has a written accountable plan
Posted on 12/12/14 at 2:15 pm to pistolpete23
It depends upon the amount paid and the way you report it.
If you just get a flat amount per month - with no requirement to justify anything to your employer - then it's considered an "unaccountable" plan and the amount should be part of your W-2 wages. If this occurs, then you can deduct your actual expenses - subject to business use - as an itemized deduction subject to 2 percent rules.
If you have to "account" for your vehicle use each month - by reporting it to the employer - then the amount is tax free, provided it doesn't exceed 1) per-mile federal reimbursement rates or 2) an amount determined by your employer to includes both fixed costs and variable costs. Most businesses use the IRS per mile amounts.
If you account to your employer, and they pay you an amount in excess of the IRS rate, then that excess is taxable to you, but you again may be able to claim an itemized deduction if the additional expense that you were reimbursed is legit.
In any event, unless your boss also is the controller, I would not "light up" him - this is probably coming from a beancounter of some sort!
If you just get a flat amount per month - with no requirement to justify anything to your employer - then it's considered an "unaccountable" plan and the amount should be part of your W-2 wages. If this occurs, then you can deduct your actual expenses - subject to business use - as an itemized deduction subject to 2 percent rules.
If you have to "account" for your vehicle use each month - by reporting it to the employer - then the amount is tax free, provided it doesn't exceed 1) per-mile federal reimbursement rates or 2) an amount determined by your employer to includes both fixed costs and variable costs. Most businesses use the IRS per mile amounts.
If you account to your employer, and they pay you an amount in excess of the IRS rate, then that excess is taxable to you, but you again may be able to claim an itemized deduction if the additional expense that you were reimbursed is legit.
In any event, unless your boss also is the controller, I would not "light up" him - this is probably coming from a beancounter of some sort!
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