A question for tax experts??

[swquilts]

DH will be changing jobs and driving a company van. He will be able to take the van home and the employer will be paying the gas bills.

Someone told DH that we will have to claim the fuel costs and use of the van as income??? It was my understanding that we only had to claim it as income IF we used the company vehicle for personal use.

Thanks!!

[swquilts]

Shameless bump!

[blazedog]

I am not a tax expert.

Theoretically your husband is liable for the benefit of the non-job related value of the benefit provided.

Your husband's employer will be providing tax information to the IRS and your husband should find out how they account for the value.

Theoretically, your husband pays taxes on that portion of the value of the benefit which he uses for personal use while that portion used for company business is excluded. It's been awhile but I think the value of the commute to and from work (for instance) is taxable to the employee UNLESS there is a business related reason why the company car is used for that commute -- or if of course there is NO commute to a single place of business as would be true for a salesmen or repairman where the initial commute is NOT from the home to the place of employment.

This is true because the IRS does not permit ANYONE to deduct the cost of the commute to and from work just as ordinary working clothing isn't deductble. Any trips taken for the benefit of the employer after ARRIVING at the regular place of employment are deductible unless reimbursed. When I was reimbursed for mileage and/or personal expenses for business travel and meals, it was never reported to the IRS. However, this is different since I was providing documentation to my employer PRIOR to their reimbursement which they would use as justification for the payment -- as well as course to keep an employee honest. :D :D

I would certainly check with both the employer and your accountant to determine how to proceed including providing logs of actual mileage used -- assuming the car is sometimes used for personal use.

Again I am totally disclaiming this as I do not practice tax law and it has been years since I took the course and the IRS may have changed the Regs as they tighened up rules of autos.

[Peggy]

Hi Susan,

I just checked this out with my DH who is certified to prepare taxes in CA. He asked me to find out what exactly your DH's job is, is the van needed to do this job or is it a company perk, and does he transport company equipment, tools etc. necessary to do that job in that van or is it strictly used to transport him from place to place. Apparently the answer to just question is complex depending on these answers.

He also said, as blazedog already has, that the company is responsible to report to the IRS the financial benefit of any personal use of their vehicle. This would show up at the end of the year as misc. income.

Peggy

[swquilts]

The van will be used to transport the products to his customers. Boxes of oil additives, transmission stuff, etc. He will be also using it for his route sales, carrying demo equipment like stuff. The benefit for us is he can bring it home every day, then drive it to work to pick up product and start his day.

I did manage to get a hold of our tax guy. He said that CA law says something about $1.50 one way is usually reported to the IRS and FTB as income for commuting.

We'll find out more when he actually starts working there.

Thanks Blaze and Peggy!