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Dave CPA
Dave CPA, Accountant
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Hi Dave- What is your interpretation of the following? The

Resolved Question:

Hi Dave-

What is your interpretation of the following?


The office was reimbursing me dollar for dollar for automobile lease and monthly garage, total amount approximately $14,100.00 per year. In 2012, the office did that for the first 8 months, then in August, 2012, they took the taxes out of each monthly payment and for the year to date as of 12/28/12 they added a total of $14,800.00, making it look as though they did not take any taxes from the expenses for the entire year and the $14,800.00 is too high. Waiting for the office to document/explain how they arrived at the $14,800.00. Am I responsible for this additional tax?

If the company agrees to pay for these expenses and as a result only asks for the submission of the expense fro reimbursement so that they do not have the contractual responsible of the lease of garage parking and car lease, now for reasons which are apparent in the body of this explanation they are attempting to say that the payments are taxable?

What is your take?
Submitted: 1 year ago.
Category: Finance
Expert:  Dave CPA replied 1 year ago.
Hello,

As per the IRS rules a company car that is used for business and personal use by the employee would be taxable for the personal use portion. So by having the company take out taxes to the payments you received makes perfect sense, and that should be reflected on your W-2. What I can't comment on and I don't understand is why they paid you the additional amount on 12/28, as that doesn't seem correct, but maybe I don't know all the facts. Maybe they are trying to make the case that the car was for business all along and all you have to due is substantiate it as full business use and it isn't taxable

BotXXXXX XXXXXne is that the car is a fringe expense and the portion attributable to business use isn't taxable and the personal portion is. You can read more in the link below page 51 and company supplied car and the substantiation rules.

http://www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf

Please let me know if you need anything else before you rate my answer. A positive rating is what I strive for.
Dave CPA, Accountant
Category: Finance
Satisfied Customers: 840
Experience: I'm a CPA with over 10 years of experience
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