I also get .22 per mile for business miles
2006-11-23 04:10:52 · 6 answers · asked by John S 1 in Business & Finance ➔ Taxes ➔ United States
You can't "write it off." The $500 IS income (you would have to pay for the car yourself otherwise,) and the 22 cents per mile pretty much seals the deal -- you are being given a car by a company, and you can't even claim the normal "I use it 60% of the time for business" sort of deduction, because you're also getting paid for that.
You can offset the $6,000 untaxed income (for which you'll be paying up to $2,000 in taxes) by charitable deductions, paying into a 401k or other retirement plan, etc, but you aren't going to be able to duck the hit on your taxes. The amount may be high enough, in fact, to incur penalties for underwithholding, so doing what you can today to get the untaxed income covered might be a good idea.
You should also consider and discuss with the company if there is a better way to handle this. They may be doing it for any number of reasons, or they might just do it as a "default" and have other options (best one being "they own the car, you use it ONLY for business reasons.")
See IRS publication 463, chapter one and, more specifically, chapter four. I've provided a link in the "source" below. You should also consider consulting a tax professional and/or accountant if reading Pub 463 gives you a headache.
2006-11-23 04:59:39 · answer #1 · answered by Dimwit D 2 · 3⤊ 0⤋
If you itemize, you can take a deduction for your miles travelled. Your employer is reimbursing you .22 per mile, but the IRS allows .445. You can fill out a form 2106, and take the difference as an itemized deduction.
The car allowance itself is income and you can't do much about it, but if you drive a lot for business, and if you itemize, you can at least get some extra deduction to make up for part of it.
2006-11-23 20:03:14 · answer #2 · answered by Judy 7 · 4⤊ 0⤋
I hope your "leasing" your vehicle. That is a #1 write off, then maintenance,gas - so keep receipts for everything pertaining to the car. Also if you are buying your car, the only thing you can write-off each year is the depreciation value. So if you can, and are not, go Lease - you'll save tons!!
2006-11-23 12:21:50 · answer #3 · answered by peaches 5 · 0⤊ 4⤋
give some to charity
2006-11-23 12:17:44 · answer #4 · answered by sicilianchick 1 · 0⤊ 1⤋
NO! to all of the above!
2006-11-29 22:14:28 · answer #5 · answered by JNISSI 3 · 0⤊ 1⤋
You can't. Sorry.
2006-11-23 14:05:37 · answer #6 · answered by Bean counter 3 · 0⤊ 0⤋