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Financial Planning / Tax Strategies
|Subject: company car service as income?||Date: 12/29/2003 6:54 PM|
|Author: QuixoticFool||Number: 68223 of 121175|
This is my first time posting to this board, and I was unable to find a similar situation or answer to my questions anywhere else. I apologize in advance for the length, but it's confusing to me and I'm unable to think of a better way to explain than giving you a brief background and showing you the email that was sent to me. Thanks in advance for any help or light you can shed on the subject.
I work evenings at a major investment bank in NYC, often not leaving the office until 2 or 3am. Part of my agreement/contract of hire is that I receive car service home every night. I've been on salary with this company nearly two years and never received an email like the one I've copied below...nor have any of my co-workers.
On Friday, I received an email from my office, stating the following:
"Please be advised that, in accordance with IRS regulations on regular and routine usage of employer provided transportation (car service), you will have imputed income reported on your 2003 Form W2. According to our records, you have used the Firm provided car service for a total of 192 commuting trips. The value of your commuting trips for the period of 12/1/02-10/31/03 is $3609. Since this income is subject to FICA and all applicable income tax withholding, the Firm will be providing tax assistance to you. The amount of tax assistance you will receive is $3086.73."
My questions are as follows:
Will this "income" be considered Earned Income by the government, such that I'll be required to pay taxes on it?
If this additional $3,609 that the Firm is apparently considering income (as value of the car service) bumps me into a new tax bracket, causing me to pay higher taxes, do I have any recourse? (I believe I'm close, but I'm not 100% sure.)
At this late date, is there anything I can do to adjust my income in the event that this additional money does bump me into the higher tax bracket?
Thanks for any help,
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