Personal Use of Company Vehicle Worksheet (2013 Rules)
Calculate the taxable fringe benefit value for personal use of a company car based on IRS regulations for 2013.
Calculator
Enter the amount a person would pay to buy the car in 2013. Include sales tax and title fees.
The total number of miles the vehicle was driven during the tax year.
Includes commuting miles and any other non-business use.
Select ‘Yes’ if the employer paid for any fuel used for personal driving.
What is the Personal Use of a Company Vehicle?
The “personal use of a company vehicle” refers to any use of an employer-provided car by an employee for non-business purposes. According to the IRS, this constitutes a non-cash fringe benefit that has a taxable value. This means the value derived from this personal use must be calculated and included in the employee’s gross income, subject to payroll taxes. This calculator helps with calculating personal use of company vehicle worksheet 2013 rules.
Common examples of personal use include commuting between home and work, running personal errands, or taking weekend trips. The IRS provides specific methods for valuing this benefit, with the “Annual Lease Value” method being the most common, which this calculator utilizes based on the 2013 guidelines.
Formula for Calculating Personal Use Value (2013)
The primary method used is the Annual Lease Value (ALV) rule. The calculation involves determining the vehicle’s value, finding its corresponding lease value from an IRS table, and then prorating that value based on personal mileage.
Formula:
Taxable Benefit = (Annual Lease Value × Personal Use Percentage) + Fuel Valuation
Where:
- Annual Lease Value (ALV) is determined from an IRS table based on the vehicle’s Fair Market Value (FMV).
- Personal Use Percentage is calculated as
(Personal Miles / Total Miles) × 100. - Fuel Valuation is an additional amount if the employer provides fuel. For 2013, a standard rate of 5.5 cents per personal mile can be used.
| Variable | Meaning | Unit | Typical Range |
|---|---|---|---|
| Fair Market Value (FMV) | The vehicle’s worth on the open market in 2013. | USD ($) | $10,000 – $59,999+ |
| Total Miles | All miles driven in the year. | Miles | 5,000 – 30,000+ |
| Personal Miles | Miles for non-business purposes. | Miles | 0 – Total Miles |
Practical Examples
Example 1: Standard Commuter
An employee is provided a company car with an FMV of $28,500 in 2013. They drive a total of 12,000 miles, with 4,000 of those being personal miles (including commuting). The employer provides fuel.
- Inputs: FMV = $28,500, Total Miles = 12,000, Personal Miles = 4,000, Fuel = Yes.
- Calculation Steps:
- ALV for a $28,500 car is $7,750 (from the 2013 IRS table).
- Personal Use % = (4,000 / 12,000) = 33.33%.
- Lease Value Portion = $7,750 * 0.3333 = $2,583.08.
- Fuel Value = 4,000 miles * $0.055/mile = $220.
- Result (Total Taxable Benefit): $2,583.08 + $220 = $2,803.08.
Example 2: High Business Use
A salesperson drives a company car with an FMV of $42,000. They drive 30,000 total miles, but only 3,000 are for personal use. The employer does not pay for personal fuel.
- Inputs: FMV = $42,000, Total Miles = 30,000, Personal Miles = 3,000, Fuel = No.
- Calculation Steps:
- ALV for a $42,000 car is $11,250.
- Personal Use % = (3,000 / 30,000) = 10%.
- Lease Value Portion = $11,250 * 0.10 = $1,125.
- Fuel Value = $0.
- Result (Total Taxable Benefit): $1,125.00.
How to Use This Calculator for Calculating Personal Use of Company Vehicle Worksheet 2013
Follow these steps for an accurate calculation:
- Enter Vehicle FMV: Input the Fair Market Value of the vehicle as of 2013. This is what it would have cost to buy, including taxes and fees.
- Add Mileage Data: Provide the total miles driven for the year and the portion of those miles that were for personal use.
- Select Fuel Option: Indicate whether your employer paid for fuel used during personal driving.
- Calculate: Click the “Calculate” button to see the results. The tool automatically finds the 2013 Annual Lease Value and computes the total taxable benefit, showing intermediate steps.
- Review Results: The output will display the total amount to be added to your income, along with the ALV, personal use percentage, and fuel value. The chart visualizes your mileage split.
Key Factors That Affect Your Taxable Benefit
- Vehicle’s Fair Market Value (FMV): This is the most significant factor. A higher FMV results in a higher Annual Lease Value, directly increasing the potential taxable benefit.
- Percentage of Personal Use: The ratio of personal miles to total miles determines how much of the Annual Lease Value is taxable. Even with an expensive car, low personal use can result in a small taxable benefit.
- Employer-Provided Fuel: If the company pays for your gas, the value of the fuel for personal miles is added to your income, increasing the total benefit.
- Total Miles Driven: While not a direct input to the formula, driving more business miles reduces the overall *percentage* of personal use, thereby lowering the taxable amount.
- Record Keeping: Accurate logs of business versus personal mileage are crucial. Without proper records, the IRS may deem all mileage as personal.
- Vehicle Availability: The benefit is calculated based on the number of days the vehicle is available for personal use, not just the days it is actually used. If it’s available all year, the full ALV is used for the calculation.
Frequently Asked Questions (FAQ)
- 1. What was the standard mileage rate for business in 2013?
- The business standard mileage rate for 2013 was 56.5 cents per mile. However, this is typically used for deducting costs on a personal vehicle used for business, not for valuing the benefit of a company-provided car.
- 2. What counts as “personal use”?
- Personal use is any driving that is not for your employer’s trade or business. This includes daily commuting to and from work, running errands, or using the car on weekends or vacations.
- 3. Can I use a different method than the Annual Lease Value?
- Yes, two other methods are the Cents-per-Mile Rule and the Commuting Rule. The Cents-per-Mile rule could only be used in 2013 for vehicles with an FMV under a certain threshold ($16,000 for cars). The Commuting Rule has very strict requirements, making the ALV method the most common.
- 4. What if the vehicle was only available for part of the year?
- If the vehicle was available for 30 consecutive days or more, you must calculate a prorated Annual Lease Value. This calculator assumes full-year availability for simplicity.
- 5. How is the Fair Market Value (FMV) determined?
- FMV is the price a willing buyer would pay a willing seller. For a car you purchased, it’s your cost. For a leased car, you can use metrics like the manufacturer’s invoice price plus 4%.
- 6. Does the Annual Lease Value include insurance and maintenance?
- Yes, the values in the IRS ALV table are comprehensive and are considered to include the value of maintenance and insurance provided by the employer. They do not, however, include the value of fuel.
- 7. What happens if I don’t keep mileage logs?
- Without adequate written records distinguishing business from personal miles, the IRS can assume 100% of the mileage is personal, leading to a much higher taxable benefit.
- 8. How is this benefit reported?
- The employer is responsible for calculating the value and including it in Box 1 (Wages, tips, other compensation) of your Form W-2. It may also be listed in Box 14 with a description like “PUCC” (Personal Use of Company Car).