1099 Tax Question?

Question

My husband bought a new vehicle and the company he works for gives him $800 a month for vehicle expenses. They put this $800 in with his regular check which taxes are taken out of, but they do not take taxes out of the $800. My question is will he still get a 1099 for the vehicle expense or is that included on his W-2 since it was not on a seperate check?

Answer 1

Being in business ourselves for 12+ yrs and pay our contractors per diem (expenses for travel, hotel etc). It does sound as if he will most likely get a 1099 for that $800 vehicle expense. It all depends on the company policy. I did 1099 for those expenses, but it could be different in your situation. Tell your husband to ask. Good luck to you, as if we need to pay more taxes :)

Answer 2

It should be on the W-2, but does not absolutely have to be. The company could issue a 1099.

Regardless, the IRS considers this to be income and you must declare it. If you file for non-reimbursed expenses incurred for his job, this would be declared by listing it as a reimbursement on the form and it will be subtracted from the total of expenses incurred (that are shown on the form) and the resulting total will be the net unreimbursed expenses. If it is larger than the expenses, the net extra is income.

If there is a net extra to declare as income, it will be subject to the two halves of social security withholding as well. Four halves if you look at retirement and medicare as the two halves because I mean his contribution (7.65%) and the employer's (7.65% also) as the two halves I mention.

If you file without itemizing which honestly doesn't seem likely, it is all subject to tax as income. And to the two halves of social security's taxation as well.

Answer 3

No, he won't get a 1099. Employees need to track their business expenses and reimbursements themselves.