We interrupt your day to bring you another article on taxes. In case you hadn’t guessed it, year-end is HUGE for tax planning (here are a few reasons why you need to be year-end prepping). There a number of criteria and factors that go into tax planning.
Today’s topic is personal use of vehicles. All employers who furnish vehicles to employees are required to add the personal use value of the vehicle to their employee’s W-2. It’s important to understand this as it will affect not only your tax situation, but your employees’ individual tax liability.
Seem complicated? Don’t worry, we have a handy packet to help. Download our Personal Use of Auto packet to learn more. Here’s a sneak peek of what it includes:
- Notice for employers who wish to have employer-provided vehicles available for personal commuting and minimal personal use (think lunch stop or personal errands on a business trip).
- An alternate notice if you would rather have your employer-provided vehicles uses specifically for business only.
- Employee notice, summarizing your position on employee-provided vehicles and responsibility for documentation (read: this is where you stand on use of vehicles and this is what you expect).
- Explanations of various methods available to figure out personal use value of employer-provided vehicles.
- A statement from employee to the employer regarding use of employer-provided vehicle (read: your employee understands your policy and signs this statement)
- Worksheet (don’t you miss those from school) to calculate employee’s taxable income from employer provided vehicle.
There are several things to consider when prepping for tax season and vehicles are just one of them. Don’t feel overwhelmed. We’re always here to help if you need us.