According to CarsDirect, mileage reimbursement up to the federal mileage reimbursement rate is not taxable, but a standard car allowance is considered to be taxable income. If an employee is not reimbursed for mileage, he or she is allowed to list that amount as a deduction on his or her annual tax return.Know More
If an employee does not drive a company vehicle, he or she may be eligible to be reimbursed for wear and tear on his or her car. When a company offers a car allowance, it is usually in one of two ways.
CarsDirect states that a standard car allowance is a set amount given to an employee each pay period by the employer. This amount is meant to be used to cover car expenses and is in lieu of the company furnishing the employee with a company vehicle. This type of car allowance is usually considered to be taxable income, and the employee will have to declare it on his or her income tax return and pay taxes on it.
Instead of a set car allowance, come companies choose to reimburse the employee for the actual miles driven. As of 2015, the federal mileage reimbursement rate is 57.5 cents per mile for business, 23 cents per mile for medical or moving purposes and 14 cents per mile while driving for charitable organizations, as stated on the IRS website. This amount is not considered to be taxable income.
A personal exemption acts like a tax deduction on a tax form and individuals can claim one for themselves and any dependents they support in order to reduce taxable income and lower taxes according to About.com. For 2015, the personal exemption amount is $4,000, an increase of $50 over 2014.Full Answer >
In general, the proceeds from a life insurance policy paid to a beneficiary are not taxable and are not included as gross income on tax returns. However, any interest received is taxable and must be reported.Full Answer >
If the employer reimburses mileage under an accountable plan, the reimbursement is not taxable. An accountable plan requires the mileage to have a business connection and be reported to the employer in a reasonable period of time, and any excess must be returned to the employer, according to the IRS.Full Answer >
According to the Internal Revenue Service, or IRS, life insurance proceeds paid out due to the death of the insured person are not taxable unless the policy has been turned over for a price. Interest income resulting from life insurance proceeds may be taxable.Full Answer >