Client with Corporation - paid for all auto expenses out of personal account

[Judy rocks]

My client paid all his auto expenses out of the personal account not the corporate account. His automobile is registered in his personal name and is not a corporate asset. He used his auto about 70 - 80 % business use. I'm looking for recommendations on how to deal with getting the auto deduction on his corporate tax return.

[geekgirldany]

He needs an accountable plan setup. I assume he is getting an officer salary. If he paid himself any shareholder distributions, then they could be reclassified as repayment for business use of his automobile. I would have him go back and fill out an excel worksheet for each month detailing the auto expenses and take 80% (whatever was business use). Then reclassify any distributions he has taken as being from an accountable plan and deduct as an expense. Of course in the future you want to impress upon him to write out checks monthly for the accountable plan, if not monthly then quarterly.

[Burke]

And to submit to the corporation the appropriate expense sheet with mileage, etc.