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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Is my employer gas allowance taxable?

Customer Question

Is my employer gas allowance taxable?

Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.



If an employer gives you a flat amount each month to cover gas or car expenses, and you are not required to submit receipts to show your actual expenses and return any amounts which exceed what you actually spent, then this is taxable income to the employee.


However, the employee may then claim a deduction for unreimbursed employee expenses by filing Form 2106 with his tax return.

Customer: replied 7 years ago.

I receive a flat rate per year for gas but my actual miles far exceed it. Do I submit the rate my employer gives me as a reimbursement?

Expert:  Merlo replied 7 years ago.

Has the employer included the amount they pay you in your taxable income?



Customer: replied 7 years ago.

I’m not sure, how can I check?

Expert:  Merlo replied 7 years ago.

Have you received your W-2 form yet? If so, check and see if the amount they paid you for the gas allowance is included in box #1 of your W-2 form. Or does box #1 just show your actual wages.



Customer: replied 7 years ago.
Box 1 just has my wages, nothing else
Expert:  Merlo replied 7 years ago.

If they did not include this in box 1 of your W-2 form, then you need to treat this as a reimbursement from the employer.


What you would do is fill out Form 2106 for unreimbursed employee expenses, and on that form you will report your actual expenses for business use of your car. You will then deduct from that amount, the amount that you received as reimbursement from your employer. The balance may then be taken as a deduction on Schedule A of your itemized deductions.


If you do not itemize your deductions but instead just use the standard deduction, then you will not be able to claim these additional expenses.