Business Owners - how do you handle car expenses? company car, mileage, receipts?

[Grindstone1]

Hello fellow entrepreneurs!

My partners and I own a S-corp. Net Income is finally on the rise. We currently use our own cars and charge Fed Mileage to corp. Is there a more advantageous method to increase the corp's car expenses? We are contemplating getting company cars - Is this a good idea to lower the Net Income and benefit the owners? I know a car allowance is taxable income so this doesnt help owners.

Thanks guys!!

[huggytree]

Hello fellow entrepreneurs!

My partners and I own a S-corp. Net Income is finally on the rise. We currently use our own cars and charge Fed Mileage to corp. Is there a more advantageous method to increase the corp's car expenses? We are contemplating getting company cars - Is this a good idea to lower the Net Income and benefit the owners? I know a car allowance is taxable income so this doesnt help owners.

Thanks guys!!

most likely owning the cars personally and claiming mileage is the best deal for you

my work van gets 8mpg and i was border line

when i bought my new van earlier this year i bought it through the company......with my last van i paid mileage and owned it myself...i had so many thousands in repairs yearly i think i may have been better off if the company owned it

if you have a normal car with minimal repair expenses and get 15-25 mpg i think its better to own it personally...do the calculations for yourself.....add up mpg, car payments and repairs.....is the 55cents per mile more than covering it?

55cents per mile is a pretty good payback when your getting 15-25 mpg...plus its tax free

[Grindstone1]

55 cents is good. Yet we only expense $50-$200/month each and mine is very minimal. Whereas car payments would be closer to $400-$500/month. I've learned that personal drive time needs to be seperated out from business - how many of you do this? Ive read if you do a token amount of personal drive time everyone is happy - does that work in the real world?

Thanks!

[huggytree]

i use my wifes cuv for small trips once in a while...i keep track of mileage in a notebook

i cash my business checks at the grocery store, so my trip is deductible......same with Home Depot and Walmart trips...there's always some materials i need and i can do some personal shopping at the same time

just keep a notebook...its not a big deal....

what do you mean by 'expense $50-200 a month'.....if you pay yourself mileage it is whatever it is.......

i guess if you arent driving much for work having the company own the vehicle may make sense for you....i put 20,000 miles on per year to my work truck

[jbechtold]

In my opinion if you're not using your vehicle strictly or a majority of the time for business (75%+) its just not worth trying to calculate things out for the tax man. Your best and simplest bet is to do $0.555 a mile.

[BNB]

Mileage. But this may be a great question for your accountant. Every single situation is unique.