Max2 Posted April 8, 2016 Share Posted April 8, 2016 I have been leasing a vehicle in my personal name and paying the payment directly out of my company account. Should I be paying myself for the payment amount and then write a personal check for the payment? The car is 50/50 Business and personal. I don't think I can depreciate it unless the Company actually owns the vehicle and I would rather stick with a lesser payment involving a lease. I have been taking I think 54 cents a mile since its in my name. Quote Link to comment Share on other sites More sharing options...
Ave Bona Cornwall Posted April 8, 2016 Share Posted April 8, 2016 I'm not an accountant. I'll lead with that. I think the mileage allowance is now $0.60 per mile, unless they lowered it when gas prices fell. My guess is that where the car is 50% personal, 50% business, the IRS would not view it favorably if the company was paying for 100% of the car. It may depend on whether you are a sole proprietor, S Corp, or C Corp. Sorry for no definite answers. Quote Link to comment Share on other sites More sharing options...
wvu80 Posted April 8, 2016 Share Posted April 8, 2016 (edited) The current federal 2016 reimbursement rate is .54 per mile. I don't know about 2015 and I can't help you on the 50/50 question. Edited April 8, 2016 by wvu80 Quote Link to comment Share on other sites More sharing options...
Arrow#422 Posted April 8, 2016 Share Posted April 8, 2016 (edited) Historical federal standard mileage / deduction rates can be found here at its.gov : https://www.irs.gov/Tax-Professionals/Standard-Mileage-Rates 2016 looks to be pegged at $0.54 per mile. 2015 was $0.575 per mile Keep excellent written records - its mandatory. I use a small calendar and note start / stop odometer readings for each day "a field". On the back of Schedule C - it asks for total miles driven yearly, commuting mileage to / from work which is not reimbursed, and then business mileage that is. I do not proclaim to be an expert tax advisor but this mileage thing is much less complicated than, say, depreciation schedules or the reporting of "installment sales". Best of luck Edited April 8, 2016 by Arrow#422 Quote Link to comment Share on other sites More sharing options...
JJkizak Posted April 8, 2016 Share Posted April 8, 2016 I get all my info from TurboTax Deluxe which selects the federal regulations and then I still wonder what it's all about. In the last 20 years I have found two major errors in TrurboTax however mainly dealing with carryovers to the next year. JJK Quote Link to comment Share on other sites More sharing options...
Arrow#422 Posted April 8, 2016 Share Posted April 8, 2016 I do mine the old fashioned way - papers stretched out across the table accordingly - so that I may actually SEE where those figures are originating from. I used Turbo Tax for 1, and only 1, year. I don't like seemingly random numbers "popping" onto my 1040 without knowing the true origin & associated calculation for the figures being inserted. With all schedules at my fingertips, I can easily backtrack to verify anything, or easily make changes if necessary. ymmv 1 Quote Link to comment Share on other sites More sharing options...
Max2 Posted April 8, 2016 Author Share Posted April 8, 2016 Thanks for the replys. It seems my CPA cant just give a straight up answer or actually act like he is looking out for me. He sends me paragraphs of IRS Bullshit and expects me to decide, which I respect, but he could break it down and earn his darn money. Quote Link to comment Share on other sites More sharing options...
jimjimbo Posted April 8, 2016 Share Posted April 8, 2016 Thanks for the replys. It seems my CPA cant just give a straight up answer or actually act like he is looking out for me. He sends me paragraphs of IRS Bullshit and expects me to decide, which I respect, but he could break it down and earn his darn money. They go to school for that… Quote Link to comment Share on other sites More sharing options...
Paducah Home Theater Posted April 8, 2016 Share Posted April 8, 2016 (edited) I've asked similar questions, and here is my very limited understanding of it. 1. Even if it's not 100% business, you can deduct a vehicle for a single member LLC business use while allowing for a personal aspect/allocation of it, meaning you're not going to deduct the full amount. Most people would come out ahead by simply deducting the mileage in this situation though but if you do this, you can pay for it out of the business account. Pretty sure it has to be over 50% business use as well, and if you don't meet that then mileage is best. 2. If you just take mileage, the idea that you're paying for it from a single member LLC business account doesn't really matter much in this situation unless you get audited and there's a bunch of other similar personal item transactions in there. At that point, somebody's going to say "holy smokes, this isn't a business account, this is a personal account". Lots of questions will come up and things may get messy. It would probably look cleaner in the case of an audit to not do this. It's not like it gets reported though, nothing's going to get flagged just because you did this. 3. An incorporated company or possibly even a multi-member LLC would be a different story. No you don't need to be paying for personal cars out of an incorporated business account. Edited April 8, 2016 by MetropolisLakeOutfitters Quote Link to comment Share on other sites More sharing options...
oldtimer Posted April 8, 2016 Share Posted April 8, 2016 (edited) I do mine the old fashioned way - papers stretched out across the table accordingly - so that I may actually SEE where those figures are originating from. I used Turbo Tax for 1, and only 1, year. I don't like seemingly random numbers "popping" onto my 1040 without knowing the true origin & associated calculation for the figures being inserted. With all schedules at my fingertips, I can easily backtrack to verify anything, or easily make changes if necessary. ymmv I'm also having a grand old time doing my taxes. It only took two separate forms to report $1.39... The car is in your name, so deduct your business portion use on your personal taxes. The company is providing the lease payments as a perk. It would be cleaner to have the company pay you the amount of the lease payments which would then be reportable as income however. I am also not an accountant and as MLO and others have said, the form of the business may matter. I did have a job once which came with a company car. The company paid for everything from washing to gas to maintenance in the form of reimbursed expenses. You might consider expensing the whole thing through the company and forget about the personal tax return aspect. There was no income to report in addition to my salary, even though I could also use it as personal transportation. Edited April 8, 2016 by oldtimer Quote Link to comment Share on other sites More sharing options...
Ceptorman Posted April 8, 2016 Share Posted April 8, 2016 I think you can deduct the whole payment amount, but since your company is paying half, you have to show the half their paying you as some sort of income. I could be wrong. I recently took my business from an S-corp to a single member LLC. I hope to stream line my taxes. Quote Link to comment Share on other sites More sharing options...
Paducah Home Theater Posted April 8, 2016 Share Posted April 8, 2016 (edited) The reason I mentioned single member LLC not being an issue is because it doesn't change your taxes at the end of the year at all, unless for some reason you opt to be taxed like a corporation. What account it comes from has zero relevance as to what your taxes are. Edited April 8, 2016 by MetropolisLakeOutfitters Quote Link to comment Share on other sites More sharing options...
Ceptorman Posted April 8, 2016 Share Posted April 8, 2016 The reason I mentioned single member LLC not being an issue is because it doesn't change your taxes at the end of the year at all, unless for some reason you opt to be taxed like a corporation. What account it comes from has zero relevance as to what your taxes are. That is what I like about a SM LLC, there are options. I just want to get away from the business employee tax form, 941,940 Quote Link to comment Share on other sites More sharing options...
mustang guy Posted April 8, 2016 Share Posted April 8, 2016 What kind of company? sub-s corp, c-corp, partnership, sole proprietership, llc, etc? Depending on the type it could be treated differently. Quote Link to comment Share on other sites More sharing options...
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