Publication 15-B Employer'S Tax Guide To Fringe Benefits

Then read across to column (2) to find the annual

You do not have to include the value of a telephone or

lease value.

any specialized equipment added to, or carried in, the

automobile if the equipment is necessary for your busi-

Annual Lease Value Table

ness. However, include the value of specialized equipment

if the employee to whom the automobile is available uses

(1)

(2)

the specialized equipment in a trade or business other than

Annual

yours.

Lease

Neither the amount that the employee considers to be

Automobile FMV

Value

the value of the benefit nor your cost for either buying or

$0 to 999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

600

leasing the automobile determines its FMV. However, see

1,000 to 1,999 . . . . . . . . . . . . . . . . . . . . . . . . .

850

Safe-harbor value, next.

2,000 to 2,999 . . . . . . . . . . . . . . . . . . . . . . . . .

1,100

Safe-harbor value. You may be able to use a safe-

3,000 to 3,999 . . . . . . . . . . . . . . . . . . . . . . . . .

1,350

harbor value as the FMV. For an automobile that you

4,000 to 4,999 . . . . . . . . . . . . . . . . . . . . . . . . .

1,600

bought at arm’s length, the safe-harbor value is your cost,

5,000 to 5,999 . . . . . . . . . . . . . . . . . . . . . . . . .

1,850

including tax, title, and other purchase expenses. You

6,000 to 6,999 . . . . . . . . . . . . . . . . . . . . . . . . .

2,100

7,000 to 7,999 . . . . . . . . . . . . . . . . . . . . . . . . .

2,350

cannot have been the manufacturer of the automobile.

8,000 to 8,999 . . . . . . . . . . . . . . . . . . . . . . . . .

2,600

For an automobile that you lease, you can use any of

9,000 to 9,999 . . . . . . . . . . . . . . . . . . . . . . . . .

2,850

the following as the safe-harbor value.

10,000 to 10,999 . . . . . . . . . . . . . . . . . . . . . . . .

3,100

•

The manufacturer’s invoice price (including options)

11,000 to 11,999 . . . . . . . . . . . . . . . . . . . . . . . .

3,350

plus 4%.

12,000 to 12,999 . . . . . . . . . . . . . . . . . . . . . . . .

3,600

•

13,000 to 13,999 . . . . . . . . . . . . . . . . . . . . . . . .

3,850

The manufacturer’s suggested retail price minus 8%

14,000 to 14,999 . . . . . . . . . . . . . . . . . . . . . . . .

4,100

(including sales tax, title, and other expenses of

15,000 to 15,999 . . . . . . . . . . . . . . . . . . . . . . . .

4,350

purchase).

16,000 to 16,999 . . . . . . . . . . . . . . . . . . . . . . . .

4,600

•

The retail value of the automobile reported by a

17,000 to 17,999 . . . . . . . . . . . . . . . . . . . . . . . .

4,850

nationally recognized pricing source if that retail

18,000 to 18,999 . . . . . . . . . . . . . . . . . . . . . . . .

5,100

19,000 to 19,999 . . . . . . . . . . . . . . . . . . . . . . . .

5,350

value is reasonable for the automobile.

20,000 to 20,999 . . . . . . . . . . . . . . . . . . . . . . . .

5,600

21,000 to 21,999 . . . . . . . . . . . . . . . . . . . . . . . .

5,850

Items included in annual lease value table. Each an-

22,000 to 22,999 . . . . . . . . . . . . . . . . . . . . . . . .

6,100

nual lease value in the table includes the value of mainte-

23,000 to 23,999 . . . . . . . . . . . . . . . . . . . . . . . .

6,350

nance and insurance for the automobile. Do not reduce

24,000 to 24,999 . . . . . . . . . . . . . . . . . . . . . . . .

6,600

the annual lease value by the value of any of these serv-

25,000 to 25,999 . . . . . . . . . . . . . . . . . . . . . . . .

6,850

ices that you did not provide. For example, do not reduce

26,000 to 27,999 . . . . . . . . . . . . . . . . . . . . . . . .

7,250

the annual lease value by the value of a maintenance

28,000 to 29,999 . . . . . . . . . . . . . . . . . . . . . . . .

7,750

service contract or insurance that you did not provide. (You

30,000 to 31,999 . . . . . . . . . . . . . . . . . . . . . . . .

8,250

can take into account the services actually provided for the

32,000 to 33,999 . . . . . . . . . . . . . . . . . . . . . . . .

8,750

34,000 to 35,999 . . . . . . . . . . . . . . . . . . . . . . . .

9,250

automobile by using the general valuation rule discussed

36,000 to 37,999 . . . . . . . . . . . . . . . . . . . . . . . .

9,750

earlier.)

38,000 to 39,999 . . . . . . . . . . . . . . . . . . . . . . . .

10,250

Items not included. The annual lease value does not

40,000 to 41,999 . . . . . . . . . . . . . . . . . . . . . . . .

10,750

include the value of fuel that you provide to an employee

42,000 to 43,999 . . . . . . . . . . . . . . . . . . . . . . . .

11,250

for personal use, regardless of whether you provide it,

44,000 to 45,999 . . . . . . . . . . . . . . . . . . . . . . . .

11,750

reimburse its cost, or have it charged to you. You must

46,000 to 47,999 . . . . . . . . . . . . . . . . . . . . . . . .

12,250

include the value of the fuel separately in the employee’s

48,000 to 49,999 . . . . . . . . . . . . . . . . . . . . . . . .

12,750

wages. You can value fuel that you provided at FMV or at

50,000 to 51,999 . . . . . . . . . . . . . . . . . . . . . . . .

13,250

5.5 cents per mile for all miles driven by the employee.

52,000 to 53,999 . . . . . . . . . . . . . . . . . . . . . . . .

13,750

However, you cannot value at 5.5 cents per mile fuel that

54,000 to 55,999 . . . . . . . . . . . . . . . . . . . . . . . .

14,250

you provide for miles driven outside the United States

56,000 to 57,999 . . . . . . . . . . . . . . . . . . . . . . . .

14,750

58,000 to 59,999 . . . . . . . . . . . . . . . . . . . . . . . .

15,250

(including its possessions and territories), Canada, and

Mexico.

For automobiles with a FMV of more than $59,999, the

If you reimburse an employee for the cost of fuel, or

annual lease value equals (.25 × the FMV of the automo-

have it charged to you, you generally value the fuel at the

bile) + $500.

amount you reimburse, or the amount charged to you if it

was bought at arm’s length.

If you have 20 or more automobiles, see Regulations

FMV. The FMV of an automobile is the amount that a

section 1.61-21(d)(3)(ii)(D).

person would pay to buy it from a third party in an

If you provide any service other than maintenance and

arm’s-length transaction in the area in which the automo-

insurance for an automobile, you must add the FMV of that

bile is bought or leased. That amount includes all purchase

service to the annual lease value of the automobile to

expenses, such as sales tax and title fees.

figure the value of the benefit.

If you have 20 or more automobiles, see Regulations

section 1.61-21(d)(5)(v). If you and the employee own or

4-year lease term. The annual lease values in the table

lease the automobile together, see Regulations section

are based on a 4-year lease term. These values will gener-

1.61-21(d)(2)(ii).

ally stay the same for the period that begins with the first

Page 20

Publication 15-B Employer'S Tax Guide To Fringe Benefits - 2003 Page 20

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