The Program Asks Two Critical Questions
- What auto fringe valuation method does the employee qualify
- How much does the employer have to put on the employee's W-2
for personal use of the company car?
What auto fringe valuation method does the employee qualify for?
There is the General Rule, and there are three Special
Valuation rules. Of the Special Valuation methods, the Commuting Rule is usually the best,
followed by the Cents-Per-Mile Rule and the Automobile Lease Rule. Unfortunately, an
employee must qualify for the lower cost rules. The program runs through those tests
with you, or you can simply override the tests, if you already know what method you will
This can be a real time saver. All you have to do is check
off the qualification boxes, and the program lets you know whether you can use a method or
not. The program has the current year limits for the various qualification tests. That way
you don't have to look them up.
How much does the employer have to put on the employee's W-2 for personal use
of the company car?
The program will compute the auto fringe amount for each
method that you provide information for. The reports, see the
reports page for more information, will provide you with documentation to answer any
questions that inquisitive employees or IRS agents might have. The amount that results in
the lowest automobile fringe to be reported on the W-2 will be clearly presented on the
The program has been designed to do as much work as possible
so you can do as little work as possible. For example, the Automobile Lease Rule needs a
Fair Market Value. Rather than asking you for the Fair Market Value which requires up to 4
computations, the program can do the 4 computations for you.
To get a feel for the capabilities of this program, you can go to the Inputs page.
program also can compute the Lease Inclusion Amount. The Lease Inclusion
Amount is the amount that must be included as income when certain leased
vehicles are used for business.