Mileage deduction for Scorp

[Harvey Lucas]

I've read previously in Quickfinder that Business auto mileage deduction method is only available to Sole Propietors and is not available to Corporations. However, in current 2005 versions of Quickfinder and TaxBook I find no similar language. Both publications seem to silent on this topic.

And of course an Scorp is not a Ccorp.

So how about it friends, is the standard mileage method available for Scorps? Or Ccorps?

[Snaggletooth]

Harveys Bristol Creme Sherry

Well, Harv, only the most austere auditor would forge an argument for driving around free these days. Even if all you present be true, there is still the mileage method available.

OK, OK, I know the smart people are going to jump my case. But have the stockholder turn in an accountable expense report for mileage at the allowed IRS deduction rate, and have the corporation pay it.

Guess what?? The payments to the stockholder are fully deductible as auto/travel expenses, and NOT taxable to the stockholder as income.

By the way, I don't have enough money to indulge in the above subject delicacy. Pabst Blue Ribbon (uggg) is more suitable to my budget.

Welcome to the board -- come back often!!

[Jiggers]

S-Corp Mileage

Agree with Snaggletooth. Use an accountable plan. Be sure to record in the corporate minutes. Makes a nice tax-free source of income that is 100% deductible by the corporation and tax-free for the shareholder/employee.

My tax practice is a corporation. I use a recorder to keep track of all work daily so that I can be sure to bill it out. I also carry it with me for vehicle mileage. It really has added to billable time and reimbursable mileage. Even trips home for lunch are deductible as my home is on the way to the bank to do my daily deposit. The 2 and 3 and 4 mile trips add up at 44.5¢ per mile.

[Matt Sova]

Accountable plan

Use the accountable plan - the car has to be owned by the shareholder/employee. If the corp owns the vehicle you use actual costs.

[jainen]

partnerships and corps

>>2005 versions of Quickfinder<<

You wouldn't expect corporate expenses to be discussed in the 1040 QF. The Small Business QF explains mileage deduction for partnerships and corps.