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NFT: Tax question on car allowances for work

MookGiants : 3/21/2018 3:36 pm
My company provided truck is probably going to get junked soon. It needs a lot of work and they are giving me the option of using my own car and getting an allowance or providing another company vehicle.

The allowance is not a huge amount, so im trying to decide what makes sense for me. I have an suv as my personal vehicle.

If i take the allowance, am I able to write off anything on my taxes? They would pay for my gas as well. I assume no, but I do my own taxes right now because they havent been overly complex.

Thanks in advance for any info
if what they give you is less than what the feds allow  
oghwga : 3/21/2018 3:46 pm : link
you can write off the difference. If it were me, I would always take the company supplied vehicle. No headaches no expenses.
It's such a pittance  
Joey in VA : 3/21/2018 3:47 pm : link
It's not even worth the extra work. I did it two years in a row and it added up to bupkus so meh
id also take their car  
UConn4523 : 3/21/2018 3:49 pm : link
because it isn't just the tax savings that you should facto - its less depreciation on your vehicle (assuming you own) or less miles if you lease.
Just for wear and tear alone I would take the company vehicle  
steve in ky : 3/21/2018 3:51 pm : link
.
Is the Allowance taxed?  
nochance : 3/21/2018 3:52 pm : link
If it is considered taxable income on your paycheck or you are
going to receive a 1099 form for the Allowance amount then you can write it off in a milege amount on a 2106 federal form. If it is not taxed with no 1099 then no deduction. Be careful with the new tax laws for 2018 because you might not get the deduction anymore. Make sure it is not taxed at all.
There will be no deduction  
BillT : 3/21/2018 3:58 pm : link
For unreimbursed employee expenses next year. So you can't write off any shortfall. If it's a lot of miles you will wear your car out so fast your head will spin and the repairs will mount up. I'd push for them to provide a vehicle.
Insurance is another issue  
Jim in Fairfax : 3/21/2018 4:26 pm : link
If you do it, make sure the company providing coverage during business use of the car.
My CPA writes off my miles  
larryflower37 : 3/21/2018 5:03 pm : link
at the federal rate minus the allowance.
You would need to track miles X .58 per mile to see if it is worthwhile.
The company car is always easier but if you don't mind the wear on your vehicle you can come out on top.
it's not worth it Mook  
gidiefor : Mod : 3/21/2018 5:32 pm : link
have them get you a car -- the wear and tear on your car alone is not worth it
I used to get $500/mpnth plus mileage but below the FTR rate  
Ivan15 : 3/21/2018 5:42 pm : link
(about half of the FTR rate at the time).

It sort of depends on how your company handles the monthly allowance, but generally I think the IRS considers that to be part of your compensation and taxable. Compensation for gas or mileage is usually just offsetting your expenses for gas and/or maintenance. You can save a little bit on taxes if your gas reimmbursement or mileage rate is less than the FTR rate.

Who pays the insurance on your current truck? If you go with a personal vehicle instead of the company vehicle, you will pay the insurance, and if you have an accident, your insurance will be primary. If it is a work related accident, I think the company's insurance will be secondary. I was sued big time for what was essentially a minor accident. It was way more than my liability coverage and the company's insurer was obliged to cover and defend.

You can make a little money by using your own vehicle but make sure you are protected.
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