will i get my car allowence so i can cover car leasing costs AND a fuel card will cover my fuel costs OR car allowence is to cover all costs and a fuel card is just a tracking mechanism not additional money ?
2007-01-02 00:31:52 · 5 answers · asked by Anonymous in Business & Finance ➔ Corporations
The amount of the car allowance will be included in your W-1 for the year. The amount that you charge on the fuel card will also be included in your income.
The business use of the car is an employee business expense on your tax return. The drawback is that these expenses are an employee business expense and you only get a deduction to the extent that such expenses exceed 2% of your adjusted gross income for the year. Generally speaking you will find that there is not much if any tax benefit for the expenses while you are paying tax on the car allowance. This is called a non-accountable plan.
If your employer had an accountable plan they would reimburse you for the business use of the auto and not include it in your income. This is a little more work on their part but it usually is cheaper for the employee from a tax point of view.
2007-01-02 01:18:29 · answer #1 · answered by waggy_33 6 · 0⤊ 0⤋
It can be either way.
Its likely the fuel card will be paid for by the employer. They use this to track miles as you have to give the milage to the garage when you buy fuel.
Remember the car allowance is a taxable benefit. However the fuel card payments are not taxable provided ALL the fuel is used for business only.
2007-01-02 00:40:54 · answer #2 · answered by Michael H 7 · 0⤊ 0⤋
It means you will pay tax on the car and the fuel card. The fuel card is really not worth having, unless you do a lot of personal mileage.
2007-01-02 00:35:53 · answer #3 · answered by Anonymous · 0⤊ 0⤋
YES! Your car allowance is to pay for the leasing of your new vehicle, usually you will have a maximum monthly allowance of which if your happy to get a car for that much, or you can pay a little extra out of your own pocket for something special.
Your fuel card is to be used for business miles, you must log all your journeys in a little pocket book. That way if you get stung for "Business car tax" you can prove how much is business and how much is private millage.
All that said, welcome to hassle free company car usage.
2007-01-02 00:40:53 · answer #4 · answered by Warren T 1 · 0⤊ 0⤋
Ask your employer. If you do it in writing, make sure you have the spell checker on.
2007-01-02 00:35:12 · answer #5 · answered by $Sun King$ 7 · 1⤊ 0⤋