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How are allowances from an employer taxed?
Posted on 7/18/19 at 5:37 pm
Posted on 7/18/19 at 5:37 pm
I'm considering a job in the construction field that has an allowance for gas/travel/etc that's paid bi-weekly.
Is that taxed like bonuses, salary, or not at all? Trying to decide how to weigh this.
Is that taxed like bonuses, salary, or not at all? Trying to decide how to weigh this.
This post was edited on 7/18/19 at 5:38 pm
7
Posted on 7/18/19 at 5:37 pm to Lazy But Talented
quote:
Is that taxed like bonuses, salary, or not at all?
Depends
Posted on 7/18/19 at 5:40 pm to Lazy But Talented
It would be best to ask them because it...
quote:
Depends
This post was edited on 7/18/19 at 5:41 pm
Posted on 7/18/19 at 5:40 pm to Mingo Was His NameO
Varies by employer?
Posted on 7/18/19 at 5:44 pm to Lazy But Talented
quote:
Varies by employer?
Varies on how its structured
Posted on 7/18/19 at 7:44 pm to Lazy But Talented
Not taxed unless it’s part of your salary
Posted on 7/19/19 at 7:21 am to Lazy But Talented
quote:
Is that taxed like bonuses, salary, or not at all? Trying to decide how to weigh this.
Well first off, bonuses are not taxed any differently than regular wages. They have different rules for how your employer withholds but at the end of the day it’s no different on your tax return.
Second, it depends. If they make you keep track of your expenses and return any excess then it’s tax free.
Posted on 7/19/19 at 7:45 am to Lazy But Talented
If you are paid a rate based on mileage actually driven for work then not taxed. If you are paid based on submitted invoices for oil changes and gas, etc for actual work trips taken then not taxed.
If you are paid a straight payment for auto allowance then it is taxed like regular payroll. You used to then be able to deduct mileage on your Schedule A under Unreimbursed Business Expenses from this but Trump Tax Act killed that. So, now you get an auto allowance and no way to write off work related travel.
If you are paid a straight payment for auto allowance then it is taxed like regular payroll. You used to then be able to deduct mileage on your Schedule A under Unreimbursed Business Expenses from this but Trump Tax Act killed that. So, now you get an auto allowance and no way to write off work related travel.
This post was edited on 7/19/19 at 8:11 am
Posted on 7/19/19 at 9:30 am to lsu13lsu
It is a fixed amount of dollars per check.
Posted on 7/19/19 at 1:15 pm to Lazy But Talented
Taxed like regular payroll
Posted on 7/19/19 at 8:14 pm to lsu13lsu
Yep, I know from experience. It sucks being taxed on a vehicle allowance while driving 40-50k miles a year. New tax plan screwed me and my employer doesn’t seem to care.
Do you know if there’s any benefit to the employer to pay it this way vs. mileage?
Do you know if there’s any benefit to the employer to pay it this way vs. mileage?
This post was edited on 7/19/19 at 8:15 pm
Posted on 7/19/19 at 10:30 pm to Lazy But Talented
Curious about this myself, and from asking around it’s a gray area. My auto allowance is a negative deduction on the deduction side of my check. Have asked a few tax folks and have gotten different answers.
Posted on 7/20/19 at 6:22 pm to Lazy But Talented
Depends on if it’s an accountable or nonaccountable arrangement
2018 tax law did away with unreimbursed employee expense deductions on Sch A hmmm.
In its an allowance paid with no accounting its reported as income and you would take deduction for actual expenses on Form 2106 and Sch A. Now, not sure what happens. Poodlebrain would have the answer RIP.
2018 tax law did away with unreimbursed employee expense deductions on Sch A hmmm.
In its an allowance paid with no accounting its reported as income and you would take deduction for actual expenses on Form 2106 and Sch A. Now, not sure what happens. Poodlebrain would have the answer RIP.
This post was edited on 7/20/19 at 6:29 pm
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