Deductions for personal use of your S corporation car

Here are two important questions for every S corporation owner:

1. Does your corporation own your business car?
2. Do you drive your corporate-owned car or other vehicle for personal purposes?

If you’re answering “yes,” it’s important to know how the IRS treats the personal use of your vehicle and how that personal use affects corporate tax deductions.

Knowing the rules can save you a lot of money as you’ll discover when you read my new article titled Tax Tips: How Your S Corporation Gets Tax Deductions for the Corporate Car?

Three ways our fact-filled article can help you:

1. We’ll tell you what to do if you own over five percent of your corporation. Do you own over five percent? If so, the personal use of your corporate car is not a qualified business use for the corporation. This “nonqualified use” has no effect on the W-2 or reimbursed value of your personal use but it can bite you in other ways. You’ll get all the details when you read the full article.
2. You’ll learn how to compute the value of your personal use. Your corporation doesn’t calculate the value of your personal use based on the cost to the corporation. Instead, the law requires that your corporation use one of two methods. We’ll tell you what they are when you read the full article.
3. We’ll explain what to do about your W-2. Should your corporation put the value of your personal use of the corporate car on your W-2? Or should you reimburse the corporation for your personal use? You’ll get straight answers when you read the full article.