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Runzheimer International
1 Runzheimer Parkway
Waterford, WI 53185-3599
262-971-2200
800-558-1702 (U.S.)
800-263-8762 (Canada)

Car Allowance


 

Paying your business drivers a car allowance can present drawbacks for everyone involved.   Consider the following:

  • A flat car allowance is generally taxable for both an employer and its drivers
  • Flat car allowances are generally not geographically-sensitive, and over-reimburse some drivers, and under-reimburse others.
  • The unnecessary tax waste paid in most flat car allowance programs represent monies that could be invested elsewhere within your business

Fortunately, there is an alternative to paying a flat car allowance.   A properly-structured car allowance plan can be IRS-compliant while fiscally advantageous to companies and fair their drivers.