My employer gives me a rental car and $40/day for gas expenses because my job involves driving 100s of miles daily. Do I pay taxes on the $40/day?

[ramsgusom]

My employer gives me a company rental car and $40/day for gas expenses because my job involves driving 100s of miles daily. Do I pay taxes on the $40/day?

When I look at my paystub, the $40/day is combined with my regular income so it looks like one amount. I am an independent contractor, so no taxes are withheld. Do I have to include the $40/day as my income and pay taxes on it?

[MichaelL1 · Accepted solution]

You are giving me some conflicting information, "My Employer",  "my pay stub", and " I am an independent contractor".

If you are a W-2 employee and getting $40 a day for gas (regardless of what is spent) this is taxable income due to having a non-accountable plan.

If you are an independent contractor, it is still income, however you can deduct the actual expenses against this in earning the income you get as an independent contractor.