vehicle

[S T]

Please forgive me
I have a question

Entering a Business Vehicle and Expenses on a Schedule C Business and completing the mileage as Biz- Commuting - Personal. It is a 100% Biz Vehicle "except" for the Employee Commuting Miles.

Biz vehicle is employer furnished to employee and we are reporting the appropriate amount on the W-2 income for Employer paid Commuting Miles.

Question, when completing the Biz Auto usage between Biz - Commute and Other - are the total miles then for percentage of deduction also in the same ratio of Biz - Commute and Other

Example Total Miles 24,000 - Commute miles calculated and reported on W-2 = 10,000 - Biz miles are 14,000. Would I then indicate that "commute miles" are 10,000 or do I disregard since it is for an employee and the employee was grossed up for the benefit on the W-2

This is my first Biz Return (after all these years) with the Employer furnished vehicle and the commuting mile equation. I just want to maximize the Sched C auto deduction for the employer. Seems like I need to deduct the commuting miles.

Thanks,

Sandy

[appelman]

I don't quite understand.

It's not his car. Just what is he trying to deduct? I would be inclined to treat it as a rental car without the rental fee. He can deduct (on Schedule A) his out-of-pocket expenses of using the car for business. I wouldn't think the "information about your vehicle" section is involved at all, since this pertains to vehicles you own or lease. And I don't see how Schedule C comes into it if he is an employee.

[S T]

Sorry

It was hard to explain

Sched C for biz (preparing the Employer Return- owner of Vehicle)
T/p which is the Sched C employer furnishes a vehicle to his employee
Employee takes the vehicle home and has "high commute" miles in an otherwise 100% business use vehicle.
On the employee we have appropriately reported the commuting miles as a fringe benefit on the Employee's W-2

I am now computing the t/p's (Employer) vehicle on the Schedule C - and am wondering about the questions of biz use, commute and other. and how or if I breakdown as such.

Do I show 14,000 biz miles
Do I show 10,000 commute miles (which are employee's commute miles that employer furnished
For a total of 24,000 miles

Then the associated gas, repairs, etc are percentaged to 14,000 biz miles or
is employer able to write off all of the associated costs based on 24,000 miles

Sandy

[BHoffman]

It was hard to explain

Sched C for biz (preparing the Employer Return- owner of Vehicle)
T/p which is the Sched C employer furnishes a vehicle to his employee
Employee takes the vehicle home and has "high commute" miles in an otherwise 100% business use vehicle.
On the employee we have appropriately reported the commuting miles as a fringe benefit on the Employee's W-2

I am now computing the t/p's (Employer) vehicle on the Schedule C - and am wondering about the questions of biz use, commute and other. and how or if I breakdown as such.

Do I show 14,000 biz miles
Do I show 10,000 commute miles (which are employee's commute miles that employer furnished
For a total of 24,000 miles

Then the associated gas, repairs, etc are percentaged to 14,000 biz miles or
is employer able to write off all of the associated costs based on 24,000 miles

Sandy

Hi Sandy - Good question. The employer is already deducting the employee's commuter use of the vehicle through payroll, so I'll guess that the 14k miles might be used. Maybe someone else will chime in.

[appelman]

I'd say 24,000 miles total.

Maybe the 10,000 should be "other" rather than "commute." What they're really after is what fraction of the car's usage was for business. I think the W2 value of the personal use can be deducted elsewhere as an employer-provided fringe benefit. But someone correct me if I'm wrong.

[veritas]

Assuming a nonrelated person

If the personal usage is either reimbursed or the personal use is included in the employee's W2 the business use is 100%.

[S T]

Vehicle Employee Commute

Yes it is a non related employee, amount is on W-2 for Employee's commute miles

So, I would show 24,000 as 100% business use?

Thanks

Sandy

[appelman]

Look at it this way.

The employer is already claiming the value of the employee's 10,000 personal miles as a payroll deduction. If he also claims the 10,000 as business mileage, say at the standard mileage rate, he is getting a double deduction for the same mileage. I think business mileage can't be more than 14,000. Whether you call the 10,000 "commuting" or "other" is arguable.

[veritas]

The employer is not

deducting the fringe benefit that is added to the employee's wages. The employer did not pay the fringe benefit. So how can there be a deduction for it?

Sandy, I may have mislead you some. Enter the mileage on form 4562 by entering business miles and commuting miles. Override the computer computation for business use by entering 100% business use. That way you will get the full depreciation deduction.

Look at instructions for form 4562 for further help.

[FEDUKE404]

Why deduct anything?

I am REALLY confused here.

It sounds as if the employer is furnishing the employee a business vehicle and is also already including as extra W2 wages the "income" created by not being able to overlook the daily (commuting) miles which the employer is effectively paying, albeit indirectly.

Having said all of that, I fail to see what, if anything, the employee has left to deduct as it's not his car in the first place. (This assumes employer pays for gas/tag/insurance/taxes etc.) What has the employee PAID that could even be a deduction??

Is this something as simple as a (taxable) fringe benefit to the employee?

Of course, maybe that morning coffee I skipped today is showing some lingering effects also.

FE

[S T]

Again

Sorry for the confusion

I am looking at the deduction for the employer NOT the employee

In the books we have recorded the value as shown on the W-2 as a fringe benefit to the Employee, however, the vehicle still has the Biz miles for the employer as well.

So trying to figure out how many miles to report on the Schedule C for the Employer to pick up those related gas, repair, insurance, etc expenses.

Sandy

[JG EA]

I don't know if this helps, but when I have one vehicle used for multiple things I record the business miles and the total miles is if it were a separate vehicle. Otherwise it would be too confusing. Of course the business miles added together reflex the whole amount that vehicle was used overall for business.

[appelman]

As BHoffman notes

deducting the fringe benefit that is added to the employee's wages. The employer did not pay the fringe benefit. So how can there be a deduction for it?

If the fringe benefit is included in W2 wages, the employer will deduct it as wages paid. Therefore, he shouldn't be deducting it again as business miles.

[veritas]

Respectfully

have to disagree. The fringe benefit is computed and added to the employee's wage but nothing is expended by the employer other than the employer's share of payroll taxes which would be deducted by the employer.

And Sandy is not talking about deducting mileage. In the facts given the employer is deducting actual expenses. To reiterate all expenses for the auto are 100% deductible.

[appelman]

See instructions to Schedule C, line 26.

If employer is going to claim 100% business use (and it doesn't matter whether he takes actual expenses or standard mileage), he must be sure that NONE of that taxable fringe ends up on line 26, which it would do in the normal course of events. (Normally, line 26 = sum of W2 wages.)