EMPLOYEE AND CAR

[TAXMAN]

Let me see if I can explain this. Business has 2 locations about 30 miles apart city A and city B. Business(S corp) actually owns vehicle. TP lives in city C about 40 miles from office A. TP drives vehicle home each night. Some nights TP has to go by city B location and then drive the 10 miles to home. Most mornings TP just drives to city A location to work. Some days tp only works in city B. 

 

Question is how do you come up with a reasonable amount to charge TP for personal use. OR what could be considered a fringe benefit(not taxable).

 

Am I really confused or is this a mute issue. TP asked the question and I could not give a very definite answer.

 

I did learn that business pays all expenses of the vehicle including GAS.

 

Thank you if you can shed light.

[Jack from Ohio]

First trip to either location each morning, and last trip home are commuting miles. NO BUSINESS DEDUCTION.

Any other driving for his business with the vehicle will be deductible business miles. Don't overthink it.

[Lynn EA USTCP in Louisiana]

An allocation for the personal use needs to be shown on the employee's W2.  I allocate $3.00 per day.

Lynn

[Max W]

It is not up to the preparer to determine this.  It should be determined by the employer who has to timely notify the employee of the method (there are 3).

being used.

 

It is then included as wages.

Lynn has chosen the easiest of the 3 ways.  There are a number of qualifications that have to be met.

 

If you want to have fun with this topic, read the attached.

http://www.gfc.com/pdf/Tax%20Services/2012%20Guidelines%20for%20Personal%20Use%20of%20Company%20Vehicles.pdf

[Jack from Ohio]

It is not up to the preparer to determine this.  It should be determined by the employer who has to timely notify the employee of the method (there are 3).

being used.

 

It is then included as wages.

Lynn has chosen the easiest of the 3 ways.  There are a number of qualifications that have to be met.

 

If you want to have fun with this topic, read the attached.

http://www.gfc.com/pdf/Tax%20Services/2012%20Guidelines%20for%20Personal%20Use%20of%20Company%20Vehicles.pdf

Once the preparer is aware of the facts and circumstances, he/she becomes liable if it is not reported correctly. I disagree with your premise. Those days are long gone.

[Max W]

Disagree.  Because the income and additional fica/med is a W-2 issue, the employer is responsible because he hasn't complied with the regs.