I have an S-Corp. How should I deduct business mileage?

Forum|Forum|6 years ago
June 7, 2019
3 replies
0 views

I have an S-Corp. I use my personal car for business If I do not reimburtse myself for the expense, milage, how can I deduct this cost from my income? Must I writge myself a check to deduct the milage?"

TurboTax Business Windows

Best answer by bwa

You do not need to write yourself a check. You can deduct the mileage or percentage of actual expenses on your own return as a employee business expense the same as any other employee.

Alternatively, the S-Corp could reimburse you and deduct the reimbursement. If done at the Government mileage rate for only business miles, it wouldn't be shown on your return. If reimbursed under some other method, you would report the expenses reduced by the reimbursement.

One thing that you can't do is let the S-Corporation claim the mileage, as the S-Corporation doesn't own the car.

mtcstleAuthor

Is a deduction on my personal 1040 limited to amounts over 2% of personal income as suggested by TaxGuyBill? If we claim the deduction on the 1120, must the corporation show a check or other receipt for the payment. The corporation may not have adequate cash here at year's end, to pay for all mileage accrued over the year. Can the corporation offer me something like a debut memo or an IOU, in the short term. The corporation operates on a "cash" basis.

bwaAnswer

Employee

You do not need to write yourself a check. You can deduct the mileage or percentage of actual expenses on your own return as a employee business expense the same as any other employee.

One thing that you can't do is let the S-Corporation claim the mileage, as the S-Corporation doesn't own the car.

TaxGuyBill

Employee

It is generally best to submit the mileage to the corporation and have the corporation write a check to reimburse you for the expenses using the Standard Mileage Rate.

If you claim the expenses as an employee of the corporation, they are limited to the amount OVER 2% of your income. If you don't otherwise itemize your deductions on Schedule A, your deduction would further be reduced or eliminated.

Beth63

For 2018 taxes employees do not get any expenses

Anonymous

who owns the vehicle, you or S-Corp if you I would recommend reimbursement checks. If S-Corp here's what the IRS says. for personal mileage, the cost (can use standard mileage rate) must be added to your W-2 along with gross up for FICA and Medicare taxes. you can then deduct all vehicle cost on S-Corp. Alternately to avoid payroll issues you can reimburse for your personal use. contemporaneous evidence of mileage regardless of who owns vehicle must be kept. failure can result in a substantial disallowance if audited. Don't forget you must tale a salary.

In addition if you have health insurance - two things. if the policy is in the name of the corp, then you must add it to your w-2 taxable wages (no fica or medicare taxes) the S-Corp gets the deduction as part of your wages. On your 1040 you then get a deduction for the SE Health insurance. IRS notice 2008-1, failure to do this requires that the corp not take the deduction for your health insurance and no deduction of your personal return. if the policy is in your name, the IRS requires that the S-Corp reimburse you. then you proceed as above as if policy in name of corp.

it is advisable to use a pro the first year. they can guide you things that you may not be aware of that can affect both you and corp.