The owner wants the company to reimburse the monthly car payment under her name. Can her company do that? Or can the company only reimburse miles and car expenses?
The owner wants the company to reimburse the monthly car payment under her name. Can her company do that? Or can the company only reimburse miles and car expenses?
10
2
Solved
Let me clarify your situation:
Just to confirm — this is a personal vehicle owned by the business owner who wants the company to pay her car payment, correct?
Here’s how this typically works if the company is an S Corporation or C Corporation:
If the vehicle is personally owned by the shareholder/employee:
- The company cannot pay the car loan (note) directly. That is not considered a deductible business expense.
- Instead, the owner can submit a reimbursement request to the company.
- The company can reimburse her using the IRS standard mileage rate (see current mileage rates).
- This reimbursement is deductible by the business and non-taxable to the employee.
- The standard mileage rate includes gas, maintenance, insurance, and depreciation.
If she prefers, she can choose to use the Actual Expense Method, but even under that, car loan principal payments are not deductible. Only lease payments may qualify.
Key Points:
- She cannot deduct or be reimbursed for car payments on a purchased vehicle.
- She can be reimbursed for gas and mileage, but only for the business-use portion (not personal driving or commuting). (see publication 463, table 1-1)
Commuting miles (from home to a regular workplace) are not deductible.
Acceptable business-use miles include:
- Visiting clients
- Going to the bank or office supply store for business
- Meeting with accountants or lawyers on business matters
Let me know if you’d like this broken down further, such as in a checklist, tax memo, or documentation format.
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The owner wants the company to reimburse the monthly car payment under her name. Can her company do that? Or can the company only reimburse miles and car expenses?
Lexi, Chatbot
I understand your concern. Is the owner trying to get the company to reimburse her personal car payment?
Yes.
Lexi, Chatbot
Is there a specific policy in place at the company regarding reimbursement for car expenses?
No.
Lexi, Chatbot
Is there anything else the lawyer should know before I connect you? Rest assured they’ll be able to help with company reimbursement for car payments.
Her car is used for business approximately 80%. As a business owner, can she claim her monthly car payment?
She wants to get reimbursed for mileage and 100% of gas — is that correct?
Benjamin
Hello, my name is Benjamin, and I’ve been a licensed attorney for over 19 years. I look forward to assisting you. While we cannot represent clients directly, we provide answers and guidance on legal issues. Let’s get started.
Benjamin
Let me clarify your situation:
Just to confirm — this is a personal vehicle owned by the business owner who wants the company to pay her car payment, correct?
Here’s how this typically works if the company is an S Corporation or C Corporation:
If the vehicle is personally owned by the shareholder/employee:
- The company cannot pay the car loan (note) directly. That is not considered a deductible business expense.
- Instead, the owner can submit a reimbursement request to the company.
- The company can reimburse her using the IRS standard mileage rate (see current mileage rates).
- This reimbursement is deductible by the business and non-taxable to the employee.
- The standard mileage rate includes gas, maintenance, insurance, and depreciation.
If she prefers, she can choose to use the Actual Expense Method, but even under that, car loan principal payments are not deductible. Only lease payments may qualify.
Key Points:
- She cannot deduct or be reimbursed for car payments on a purchased vehicle.
- She can be reimbursed for gas and mileage, but only for the business-use portion (not personal driving or commuting). (see publication 463, table 1-1)
Commuting miles (from home to a regular workplace) are not deductible.
Acceptable business-use miles include:
- Visiting clients
- Going to the bank or office supply store for business
- Meeting with accountants or lawyers on business matters
Let me know if you’d like this broken down further, such as in a checklist, tax memo, or documentation format.
Thank you! This clears up and confirms my thinking
Benjamin
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