WITAXLADY Posted August 22, 2020 Report Posted August 22, 2020 client contacts me wants to buy a "commuter" vehicle - has 2 offices now about 1 hour apart.. Says she heard that all the rest of hers have to be pad off? 1 - I have never heard of that? 2 - Should this be purchased thru the S corp? rather than "leased" to the it? 3 - If leased - she can use mileage - that would be an advantage and then only needs to keep track of mileage from 1st to 2nd location. If purchased - she has to use gas, insurance, repairs etc - not mileage and her commuting miles will be to the 1st location and home from the 2nd location and all personal miles and will need to show on her W-2? Correct? Nothing about other vehicles having loans paid off?? Any insight would be appreciated. Best, Darlene Quote
Lion EA Posted August 22, 2020 Report Posted August 22, 2020 She can choose mileage. Or, she can choose actual expenses. Either way, she needs to know the business mileage and total mileage. If the corporation owns the vehicle, it must include her personal usage on her W-2. If she owns the vehicle, she'll want the corporation to establish an accountable plan so she can turn in expense accounts and get reimbursed for business mileage. The reimbursements will NOT be income to her but WILL be deductions to the corporation. She can buy or lease a vehicle. The corporation can buy or lease a vehicle. WHERE did she hear that she has to pay off all the rest of her cars? If the finance company, maybe she has too much credit outstanding to get a good loan on yet another car. How many cars does she have?! 2 Quote
WITAXLADY Posted August 22, 2020 Author Report Posted August 22, 2020 Thank you - very well laid out. She already has a plan so we would just add depending what she decides.. Finance company - good point - but high income - do not see why that would be a factor Best, D Quote
Lion EA Posted August 22, 2020 Report Posted August 22, 2020 She can be high income but still have too much outstanding debt used and available. Or, the corporation could have too high a debt to equity ratio. Find out who told her to pay off her other cars. Tell her to come to you for tax advice. 1 Quote
WITAXLADY Posted September 1, 2020 Author Report Posted September 1, 2020 Thank you! I wish they would Before! right! Quote
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