My employer has offered the following arrangement. I'm not sure I understand this, or agree with it. Please offer any advice or opinion. I will provide a vehicle for use at work. In exchange I am to receive a monthly check that is not taxed in any way. It is described loosely as "vehicle reimbursement" although I do not submit any receipts or expenses. It has been suggested that all I need to do is keep track of mileage and declare this on my individual taxes (I assume mileage x $.565) as a deduction. I assume I would need to declare the payment as income.
Does this sound reasonable?
Answer:
It is reasonable. Why??? I guess your ER uses accountable plan since from your ER, you are to receive a monthly check that is not taxed in any way(not reported on your W2). So,you, as an EE, may be using your own vehicle for your ER’s business needs. Of course, you may be able to deduct these expenses as miscellaneous itemized deductions on Sch A as long as you itemize your deductions on your own tax return(if you do not itemize your deductions, then you can’t deduct it on you return) ONLY if your ER doesn’t reimburse you or your ER ‘s reimbursement is less than your expenses. Many ERs choose to reimburse the EEs who do substantial amounts of business driving in their own vehicles. As long as your ER reimburses you, then, you can’t deduct these expenses as misc itemized deductions on Sch A UNLESS your ER’s reimbursement is LESS than your vehicle expenses. On the contrary, if your ER’s reimbursement exceeds your actual vehicle expenses, then you must be..Read more...
Does this sound reasonable?
Answer:
It is reasonable. Why??? I guess your ER uses accountable plan since from your ER, you are to receive a monthly check that is not taxed in any way(not reported on your W2). So,you, as an EE, may be using your own vehicle for your ER’s business needs. Of course, you may be able to deduct these expenses as miscellaneous itemized deductions on Sch A as long as you itemize your deductions on your own tax return(if you do not itemize your deductions, then you can’t deduct it on you return) ONLY if your ER doesn’t reimburse you or your ER ‘s reimbursement is less than your expenses. Many ERs choose to reimburse the EEs who do substantial amounts of business driving in their own vehicles. As long as your ER reimburses you, then, you can’t deduct these expenses as misc itemized deductions on Sch A UNLESS your ER’s reimbursement is LESS than your vehicle expenses. On the contrary, if your ER’s reimbursement exceeds your actual vehicle expenses, then you must be..Read more...
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