Discussion:S-Corp Vehicle - Is it legal?
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| Revision as of 16:08, 23 October 2009 KathiJud (Talk | contribs) ← Previous diff |
Revision as of 16:24, 23 October 2009 JR1 (Talk | contribs) (Yeah, you're ove) Next diff → |
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| A car allowance that is not an accountable plan with a log submitted into the corporate records is also wages. No 1099, no Schedule C entries.}} | A car allowance that is not an accountable plan with a log submitted into the corporate records is also wages. No 1099, no Schedule C entries.}} | ||
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| + | {{ForumReplyPost|UserID=JR1|Date=October 23, 2009|Text=Yeah, you're over-complicating it. Just a mileage reimbursement, plain and simple. Book to mileage expense or something like that and be done with it. Done done.}} | ||
Revision as of 16:24, 23 October 2009
Discussion Forum Index --> Basic Tax Questions --> S-Corp Vehicle - Is it legal?
Discussion Forum Index --> Tax Questions --> S-Corp Vehicle - Is it legal?
| 23 October 2009 | |
| I just want to see if this is the best way to deal with this subject. I know it’s been touched on numerous times in tax almanac, but this to me seems like the most tax advantage way. My true question is…is this legal?
Situation: S-Corp has one shareholder. No vehicles are on the books as an asset. The shareholder and entity draw up a contract that states that the shareholder will be reimbursed 55 cents per mile on usage of the vehicle for traveling to and from different work related activities. No commuting involved. The shareholder keeps a log of the mileage. Let’ say the shareholder drives 1,000 miles for the year and is given a check for 550$. The corp deducts this as equipment rental. The shareholder completes his 1040 and puts $550 on schedule C as income. The shareholder also deducts $550 as a vehicle expense. That way it equals out to $0 in income on Schedule C. Is this legal? | |
| 23 October 2009 | |
| To the extent the mileage reimbursement does not exceed the federal per mile rate, I believe it should be auto expense to the S Corp since it is based on an accountable plan for mileage. No 1099, no Schedule C entries. Payments in excess of the federal per mile rate probably are wages.
A car allowance that is not an accountable plan with a log submitted into the corporate records is also wages. No 1099, no Schedule C entries. | |
| October 23, 2009 | |
| Yeah, you're over-complicating it. Just a mileage reimbursement, plain and simple. Book to mileage expense or something like that and be done with it. Done done. | |
