Company Vehicle

What is the name of your state? TEXAS

My husband started a new job with a new company in july, and he was given a company work truck. Last week they told him they were going to charge him taxes on the truck...FOR THE FULL YEAR! Can they do that?, or can they only charge you taxes on the months you actually have the truck? I guess my point is if he quits in the next couple of months than he has been charged for months he doesnt even have the truck. If I am right, do you know where I can find that tax law, his company says its new and thats why I haven't been able to find it! PLEASE HELP, we cant afford for them to take the money out of his check next month.
Thanks alot
Nicole

[Snipes5]

If you are referring to income tax, the value of a company car is considered taxable income.

If you are referring to property taxes, they are likely not his responsibility, since it isn't his car. However, you will have to check the fine print on whatever agreement he may have signed when they began allowing him to use the car.

Property taxes on a car aren't that much, unless of course it's a brand-new Cadillac Escalade.

Snipes

i understand that we can be taxed, and I am not argueing that at all. They are charging us taxes based on a full years lease on the vehicle. So I just didnt know if they could charge us for a full years lease or just the months he actually had the vehicle in his possession. its a 2004 Nissan Titan, and they are charging us $800, which is based on an one year lease value of almost $ 8,000..... and he didnt sign any agreement, in regards to the truck.

[abezon]

1. Who is "they"?

2. What exactly are the $800 taxes for?

3. Unless there's an agreement to the contrary, I doubt the employer can make him pay any of the taxes. However, it's probably worth $800 to keep his job.

4. A company car may or may not be taxable income. If the full value of the car would have been deductible had he owned it, you do not need to pay taxes on the value of the vehicle. If the value of the company provided car (lease costs, fuel, insurance, etc paid by employer while he had the car) EXCEEDS his qualifying business transportation costs (lease costs, fuel, insurance, etc paid by him or the company AND prorated for business miles vs. total miles driven), only the value of the non-business use is taxable.

He needs to keep meticulous mileage logs & expense records so he can determine how many miles were work-related, how many were for driving back & forth to the main office, & how many other miles he drove. I suggest he start reconstructing his records now. (Trip sheets & maps, oh boy!)

Example: The car provided is worth $4,800 ($4,000 lease payments + $800 for insurance). He drove 10,000 miles total; 6,000 traveling between various work sites. His total car expenses had he leased the car himself would have been $6,720 ($4,000 lease + $800 insurance + $1000 fuel + $120 repairs + $800 taxes). His deductible transportation costs would have been 6000 bus.miles/10,000 total miles x $6720 = $4,032. His taxable income would be $4,800 - 4,032 = $768.

Wasn't that fun? I suggest you see a tax pro with experience calculating travel expenses. You should also find out if the company plans to include the entire value of the car in his taxable income (box 1 W-2) or if they will report it separately on his W-2 box 14. The second is better for you.