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

(1) Automobile FMV

(2) Annual Lease

leasing the automobile determines its FMV. However, see

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

1,350

Safe-harbor value, next.

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

1,600

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

1,850

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

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

2,100

safe-harbor value as the FMV.

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

2,350

For an automobile you bought at arm’s length, the

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

2,600

safe-harbor value is your cost, including sales tax, title, and

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

2,850

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

3,100

other purchase expenses. You cannot have been the man-

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

3,350

ufacturer of the automobile.

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

3,600

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

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

3,850

following as the safe-harbor value.

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

4,100

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

4,350

•

The manufacturer’s invoice price (including options)

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

4,600

plus 4%.

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

4,850

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

5,100

•

The manufacturer’s suggested retail price minus 8%

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

5,350

(including sales tax, title, and other expenses of

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

5,600

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

5,850

purchase).

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

6,100

•

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

6,350

The retail value of the automobile reported by a

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

6,600

nationally recognized pricing source if that retail

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

6,850

value is reasonable for the automobile.

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

7,250

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

7,750

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

8,250

Items included in annual lease value table. Each an-

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

8,750

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

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

9,250

nance and insurance for the automobile. Do not reduce the

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

9,750

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

10,250

annual lease value by the value of any of these services

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

10,750

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

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

11,250

annual lease value by the value of a maintenance service

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

11,750

contract or insurance you did not provide. You can take

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

12,250

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

12,750

into account the services actually provided for the automo-

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

13,250

bile by using the general valuation rule discussed earlier.

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

13,750

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

14,250

Items not included. The annual lease value does not

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

14,750

include the value of fuel you provide to an employee for

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

15,250

personal use, regardless of whether you provide it, reim-

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

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

the value of the fuel separately in the employee’s wages.

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

You can value fuel you provided at FMV or at 5.5 cents per

bile) + $500.

mile for all miles driven by the employee. However, you

cannot value at 5.5 cents per mile fuel you provide for miles

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

driven outside the United States (including its possessions

would pay to buy it from a third party in an arm’s-length

and territories), Canada, and Mexico.

transaction in the area in which the automobile is bought or

leased. That amount includes all purchase expenses, such

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

as sales tax and title fees.

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

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

If you have 20 or more automobiles, see Regulations

was bought at arm’s length.

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

lease the automobile together, see Regulations section

If you have 20 or more automobiles, see Regulations

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

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

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

If you provide any service other than maintenance and

any specialized equipment added to, or carried in, the

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

automobile if the equipment is necessary for your busi-

service to the annual lease value of the automobile to

ness. However, include the value of specialized equipment

figure the value of the benefit.

if the employee to whom the automobile is available uses

the specialized equipment in a trade or business other than

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

yours.

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

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

Neither the amount the employee considers to be the

value of the benefit nor your cost for either buying or

date you use this rule for the automobile and ends on

Publication 15-B (2012)

Page 27

Publication 15-B - Employer'S Tax Guide To Fringe Benefits - 2012 Page 27

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