Answers · S corporations
Can an S Corporation Deduct Vehicle Expenses?
An S corporation can own a vehicle or reimburse shareholder business use, but personal use and strict substantiation must be handled.
This question is answered in full on the main page for it.
How it works
The rule, and what it turns on.
Company-owned vehicle personal use can create taxable fringe-benefit income. Personally owned vehicle expenses can often be reimbursed through an accountable plan.
Example
Company pickup is 80% business/20% personal by mileage; personal-use value generally needs payroll treatment.
Common mistakes
What we see go wrong, and what we do instead.
- No mileage log.
- Ignoring personal use.
A better approach
- Consider accountable-plan reimbursement for personally owned vehicles.
Authority
Where this comes from, so you can check it.
IRC §§162 and 274(d); Treas. Reg. §1.274-5T; IRS Publication 463; current IRS standard mileage guidance.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
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