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    Willis3000's Avatar
    Willis3000 Posts: 10, Reputation: 1
    New Member
    		  
    #1

    Feb 4, 2010, 03:55 PM
    Payment of allowance to employees for auto expenses
    If our company pays a $300/month allowance to an employee to compensate them for using their personal vehicle for work, would we have to include it as taxible wages on either their W2 or separately on a 1099-MISC?

    In other words, can it be expensed?
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Feb 5, 2010, 08:10 AM

    Report separately on schedule C or C-EZ (Form 1040). Claim the mileage deduction.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #3

    Feb 8, 2010, 09:09 AM

    Monthly car allowances should be included as taxable wages on the employee's W-2. The employee can then deduct business mileage as an unreimbursed business expense.
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