- 1). Avoid the personal use of a company vehicle, such as to commute to and from work. Personal use of a company vehicle classifies as a fringe benefit and is subject to income tax.
- 2). Communicate with your employer about fringe benefits excluded as a special rule, under IRS Publication 15-B, as de minimus transportation benefits, or benefits provided that have so little value that accounting for them would be impracticable. Keep in mind that employers must take into account how reasonable the occasional provision of such a benefit is and how frequently such benefits are provided when classifying any personal use of a company vehicle as de minimus.
- 3). Ask your employer about providing a commuter highway vehicle. A commuter highway vehicle is any highway vehicle that seats at least seven adults, driver included. The use of commuter highway vehicles is classified as a qualified transportaion benefit, meaning it is excludable from wages and is not subject to tax, up to a certain amount. A minimum of 80 percent of the vehicle's mileage must be used for transporting employees between their homes and work, and at least half of the passengers must be employees of the vehicle provider for the benefit to qualify for exclusion. In 2010, up to $230 per month was excludable.
- 4). Pay your employer, or ask that they deduct from your paycheck, the value of any personal use of a company vehicle that does not qualify for exclusion from wages. In 2010, the personal use of a company vehicle was valued at 50 cents per mile. Alternatively, if used for commuting, the value of the personal use of a company vehicle was $1.50 for each one-way commute.
Subscribe to our newsletter
Sign up here to get the latest news, updates and special offers delivered directly to your inbox.
You can unsubscribe at any time
Next Post