- quote -

Except of course the deduction is only 36 cents per mile, so
OP would have 1.5 cents per mile income. Report on line 7.

Cheer$,
Harlan Lunsford, EA n LA

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- quote -

Are there any tax consequences of your current arrangement?
Doe any income show up on your W-2 for this car? Do you
have any personal use? If the current car is tax free, I
would stick with it.

- quote -

If you record your mileage and report it to your company and
they pay you for it, there are no tax consequences or
reporting requirements. This is your second best option.

- quote -

This would be the most administratively complex of the lot.
It is an employee business expense subject to the 2% of AGI
limitation. Generally a bad deal.

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

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In the past I have always had a company car. Recently I was
given the option of continuing with a company car or being
reimbursed on my personal car. I think I would be either
given a flat monthly car allowance or receive .375 for each
mile driven. The car allowance would be treated as a fringe
benefit, which I think would cause me some tax headaches. I
like the idea of buying my own car, however, I'm not sure of
what type of tax problems might arise.

My questions are as follows:
1) Would it be a mistake to move from a company car to using
my personal car?

2) If I receive .375 per mile for mileage, would there be
any tax consequences? Is it treated as a reimbursement?
Would I have to file any special tax forms?

3) I see nothing but problems with a car allowance. Would it
be trated as income? If so, do I then have to get into
depreciation?

Thanks for any help.

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