MENUMENU
  • FREE RESOURCES
        • Accounts Payable
          Finally! The trick to securing greater T&E compliance
          Benefits
          Rooting out folks who don’t belong on your health plan: A 6-point dependent audit checklist
          IT
          3 costly misconceptions about biz email compromise
          Credit and Collections
          Collecting via email: 4 must-make moves in your subject line
          Accounts Payable
          5 Tough-to-spot signs that an invoice is fake
  • PREMIUM CONTENT
        • Staff management
          120 Proven Communications Tips for Today’s CFO
        • Payroll
          Handling Nonexempt Employee Pay: Stay Compliant and Avoid DOL Audits
          Accounts Payable
          T&E Best Practices: Complete Guide to Ensure Compliance
          Payroll
          Payroll Best Practices: 4 Ways to Save Time and Money
        • Staff management
          Email Best Practices: A 6-Question Quiz
          Staff management
          Innovative Communications Strategies: An Email Case Study
          Staff management
          A 5-part Framework for Successful Workplace Communications
        • SEE MORE
          PREMIUM RESOURCES
  • CORONAVIRUS RESOURCES
  • LOGIN
  • SIGN UP FREE

CFO Daily News

MENUMENU
  • FREE RESOURCES
        • Accounts Payable
          Finally! The trick to securing greater T&E compliance
          Benefits
          Rooting out folks who don’t belong on your health plan: A 6-point dependent audit checklist
          IT
          3 costly misconceptions about biz email compromise
          Credit and Collections
          Collecting via email: 4 must-make moves in your subject line
          Accounts Payable
          5 Tough-to-spot signs that an invoice is fake
  • PREMIUM CONTENT
        • Staff management
          120 Proven Communications Tips for Today’s CFO
        • Payroll
          Handling Nonexempt Employee Pay: Stay Compliant and Avoid DOL Audits
          Accounts Payable
          T&E Best Practices: Complete Guide to Ensure Compliance
          Payroll
          Payroll Best Practices: 4 Ways to Save Time and Money
        • Staff management
          Email Best Practices: A 6-Question Quiz
          Staff management
          Innovative Communications Strategies: An Email Case Study
          Staff management
          A 5-part Framework for Successful Workplace Communications
        • SEE MORE
          PREMIUM RESOURCES
  • CORONAVIRUS RESOURCES
  • Accounts Payable
  • Credit and Collections
  • Payroll
  • Accounting
  • Benefits
  • Finance Technology
  • More
    • Employment Law
    • Strategy
    • Policy and Culture
    • Fraud
    • Payments and Transactions
    • Budgeting and Forecasting
    • Banking
    • Staff Management
    • Cost Control
    • Supply Chain
    • IT

IRS issues new regs on company cars and personal use

IRS issues new regs on company cars and personal use
Jennifer Azara
by Jennifer Azara
March 5, 2020
  • Accounting
2 minute read
  • SHARE ON

Calculating the value of company cars employees drive for their personal use just got a little easier now that IRS has released final regs. And they took effect Feb. 5, 2020. 

The final regs provide the details you and your payroll department need to tax this fringe benefit correctly in accordance with the Tax Cuts and Jobs Act.

You have options with company cars

To determine the fair market value (FMV) of the fringe benefit, you can use special valuation rules. The new regs note two such rules:

  1. The fleet-average valuation rule. If your company has a fleet of at least 20 vehicles, you can use this valuation rule as an option. You’d calculate the average FMV of all the vehicles in the fleet. From there, you’d use the IRS Annual Lease Value Table.
  2. The vehicle cents-per-mile valuation rule. With this method, you’d multiply the IRS’ standard mileage rate — which sits at 57.5 cents for this year — by the number of miles the worker’s driven in the company vehicle for personal reasons.

But of course, there’s a catch. To use either of these methods, the vehicle FMV can’t exceed a certain amount. The good news? That maximum amount is higher than it was in the past: $50,400 for 2020.

What’s more, transition relief is available for certain employers who didn’t qualify to use either of the special valuation methods in tax years 2018 or 2019.

The maximum FMV of company vehicles was adjusted retroactively for each year in the IRS’ final regs.

And if your company couldn’t use the fleet-average valuation rule because the value of a vehicle exceeded the existing maximum prior to Jan. 1, 2018, you’re allowed to use new values updated for inflation as relief. Note: The value of any vehicles in the fleet can’t exceed $50,000 on Jan. 1, 2018 or $50,400 on Jan. 1, 2019.

Jennifer Azara
Jennifer Azara
Jennifer, a member of the CFO Daily News staff, has covered business and finance for more than 22 years. She has written for CFOs, credit and collections professionals and accounts payable practitioners and has spoken at industry conferences on sales and use tax compliance.

Keep Up To Date with the Latest Finance News

With CFO Daily News arriving in your inbox, you will never miss critical stories on accounting, benefits, payroll & employment law strategies.

Sign up for a free CFO Daily News membership and get our newsletter!
  • This field is for validation purposes and should be left unchanged.
CFO Daily News Logo
  • ABOUT CFO DAILY NEWS
  • ADVERTISE WITH US
  • WRITE FOR US
  • CONTACT
  • Accounting
  • Benefits
  • Payroll
  • Policy and Culture
  • Employment Law
  • Fraud
  • Finance Technology
  • Accounts Payable
  • Credit and Collections
  • Strategy
  • Payments and Transactions
  • Budgeting and Forecasting
  • Banking
  • Staff Management
  • Cost Control
  • Supply Chain
  • IT

CFO Daily News, part of the SuccessFuel Network, provides the latest Finance and employment law news for Finance professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day’s headlines, CFO Daily News delivers actionable insights, helping Finance execs understand what Finance trends mean to their business.

Privacy Policy Terms of Service
Copyright © 2021 SuccessFuel

WELCOME BACK!

Enter your username and password below to log in

Forget Your Username or Password?

Reset Password

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.

Log In

preloader