I received a 1099-misc from my employer for a car allowance. I also received a w2. is this right?

[JaimeG]

Was the Car Allowance part of an accountable reimbursement plan in which you provide receipts in exchange for getting paid for the expenses?

[jordan-howd]

No receipts are provided. The payments are level each month.

[JaimeG]

Ok, In which box is the income reported?

[jordan-howd]

Box 3

[JaimeG · Accepted solution]

Good, the situation that your employer presented is one that can become quite complicated but fortunately they placed the income in Box 3 of the 1099-MISC. You will report this income in your Tax Return by following the steps below:

1. Log in to your TurboTax Account
2. From the main upper most tab select Federal Taxes
3. In the secondary tab select Wages and Income
4. Scroll down to Other Common Income and select Show More
5. Once the screen drops down select Start for Form 1099-MISC
6. The next screen will confirm that you received a 1099-MISC click on Yes
7. Here we are! You will be able to enter all of the information from your 1099-MISC on this form

The program will walk you through entering all of the information from your 1099-MISC. It is very important that the Dollar amount you enter is from Box 3 of the 1099 that is labeled as Other Income. This will keep that income in the proper section of your 1040 so that you don't pay Self-Employed Taxes on this income.

If you kept track of your the Expenses related to this Allowance you can Itemize them in Schedule A. These expenses will only be deductible if they exceed 2% of your AGI. Additionally you must understand that Schedule A is an option you have to a Standard Deduction. Schedule A contains other types of expenses that are deductible but if the sum of these expenses does not exceed the amount of your Standard Deduction it will not be beneficial to your Tax Return.

Below are the amounts of the Standard Deduction according to your Filing Status for Tax Year 2016:

• Single $6,300.00
• Married Filing Joint or Qualified Widow(er) $12,600.00
• Married Filing Separate $6,300.00
• Head of Household $9300.00
• Dependent $1,050.00

I have also attached a checklist of common Itemized Deductions for you to look over and maximize your opportunity of reaching the best possible Deduction.