Hi - My husband's job provides him with a vehicle allowance that is not taxed on his paystub. I believe we may be paying taxes on it though when we filed our taxes through TurboTax. Was I supposed to submit any additional forms about this allowance to ensure we were not taxed? He submits mileage 4x per year. Thanks.
Hi, @Amberlou ! Generally speaking, his W-2 should only include taxable wages, so if you entered that correctly into TurboTax, that should be all that's required as the vehicle allowance should not be included. What makes you think you're paying tax on this amount?
Ok. I don't really know but assumed because we owed over $2K and I can't figure out why. I completed both W4's with married filing jointly and made sure the multiple jobs box was checked on both. I only claimed the exemption for the kids on mine.
Some tax credits were eliminated this year, so it's possible that you were affected by this. It sounds like increasing your withholding slightly might be in order. Often, the simplest solution is to simply request an extra withholding amount on Form W-4, which can be done under Step 4, (c). You can specify an exact dollar amount that you would like withheld above and beyond your existing withholding. Hope this helps!
Yes, a vehicle allowance is treated as taxable income by the IRS and most state taxing authorities. You don't need to fill out additional forms for this. Did you file your taxes in 2022 and find out that this allowance increased your tax due? If that is the case you can change your W-4 to have them withhold the amount of extra tax you will pay. You can break the amount out by so much per paycheck to ensure you won't have a liability in 2023. However, since half the year is already gone you may need to double up on those amounts coming our of your paycheck.