husband is trying to decide between two job offers. It’s not a deciding factor but one is offering a company car which we have zero experience with.
It says something about paying them a personal use fee (listed at $190 which I assume is monthly but need to clarify). They pay everything-gas, tolls, repairs, insurance.
The hiring manager said something like- “there’s a personal use fee if $190 but this goes against the taxes you’d pay at year end on the car”
What taxes would a person owe if they have a company car?
He’s not thrilled because he has a fairly new car he likes. But if there’s a big tax implication plus this $190 is a monthly fee, this may be a deal breaker.
I think that when a company car is driven for personal use, including commuting to/from office, that time is considered a benefit that is taxable. How this is measured or calculated, or how anyone (other than the driver) could audit how and when it is used outside of work, I have no clue.
If he tells them this is a dealbreaker, perhaps they might get rid of or reduce the personal use fee. If at the other company he would be using his personal car substantially for work (which will result in more wear and tear), perhaps it is a better deal to have a company car.
Time, "wear and tear" depreciation, maintenance, gas and insurance are the major costs of owning a car..... several thousands per year. Depending on how much he drives, 5 to 6 figures per year.
Get a better understanding on the tax liability. How much of the car will be used for business?
The fed. tax write-off for business use is around .53 cents per mile.
I suspect the company car may be a better deal.
yes, that’s what I’m asking. What’s the tax liability? Issue is he has a car- a few years old so it’s already done most of its depreciating. I think it’s going to “cost” us more to get this “free” car.
conandrob240 said:yes, that’s what I’m asking. What’s the tax liability? Issue is he has a car- a few years old so it’s already done most of its depreciating. I think it’s going to “cost” us more to get this “free” car.
Not necessarily, "a few years old" is when the larger repair bills start coming in. Muffler, shocks, water pump, air conditioner and so forth.
$1800 a month. 2 Bedrooms and 1 Bath
2 Bd | 1Full Ba$1,800