Question

Is car allowance considered taxable income?

Forum|Forum|6 years ago
March 25, 2020
1 reply
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I receive car allowance (same amount every paycheck). The car allowance is included in my paychecks. However when I received my W-2 from my employer it does not appear that the total yearly amount of the car allowance is included in "Wages Box 1." From what I've read, I am not reimbursed under an accountable plan - ie. don't have to keep track of expenses, don't have to return excess, etc. Therefore, wouldn't the car allowance be considered to be under a nonaccountable plan? And should my employer have included the car allowance in box 1 of my W-2?? If they didn't have to put it on my W-2, but it IS considered taxable income, then where do I input it into TurboTax?? Thank you for helping me with this confusion!

TurboTax Self Employed Online

J

JamesG1

From your year-end pay stub, you may be able to determine whether the car allowance is reported as taxable income in box 1 of your W-2.

If the car allowance is not included in box 1 of your W-2, we presume that the employer made the payment under an IRS accountable plan. Please ask your employer if you have further questions.

If you need to enter the amount in TurboTax, report the amount as other taxable income.

Down the left side of the screen, click on Federal.
Across the top of the screen, click on Income & expenses.
At the screen Your income and expenses, scroll down to Less common income.
Select Miscellaneous Income, click on Revisit/Start.
Choose Other income not already reported on a Form W-2 or Form 1099.