I am sole owner of 1120 S Corp. Car purchased in company name, S Corp will depreciate the vehicle but my question is can the S Corp deduct the mileage and depreciation?

[DanielV01]

Not both, no.  On an individual return, (Form 1040), claiming the standard mileage deduction is a provision that is allowed to simplify claims of vehicle expenses.  However, Corporations, S-Corps, and Partnerships may only claim actual expenses for vehicles.  Thus, your S-corp may claim depreciation, fuel expenses, oil expenses, repairs, insurance, and so forth.  But not mileage, when the car is owned in the corporation's name. (Even on an individual return, you may claim either depreciation and actual expenses or the standard mileage rate, but not both).  

However, there is a workaround.  That workaround is for you to own the vehicle (Not the S-Corp).  You can set up an accountable plan for the corporation, and then you submit a log of your mileage.  The S-Corp can reimburse you (tax-free to your personal income, and a deduction from corporate income) up to the standard mileage rate.  More information can be accessed in SuperUser Opus17's answer to the question in the following link:  https://ttlc.intuit.com/questions/4124147

[Jennifer13]

On a related note, @taxesohmy2017,@DanielV01 , and perhaps I'm mixing things up, but I also bought a car under company name, CASH transaction out of business earnings. Do I get to depreciate AND reduce my net income for 2019 for the car purchase amount? 

[sherij1]

I am the sole proprietor of an S-corp.  I purchased a vehicle in my name but mostly use it for my business and pay the monthly note out of my business account.  Where do I need to deduct that on the 1120S?

[Irene2805]

You can deduct the interest on the loan under interest expense on the 1120-S. You can't deduct the entire payment since that is considered "debt service."

A better way of handling this, since the vehicle is in your name and not that of the business is for you to make the payments on the vehicle and have the S-Corp reimburse you, if this is provided for in the S-Corp documents.

[sherij1]

Thank you so much for clearing that up for me.  That way makes total sense.  Thanks again

[sherij1]

One more question, if the S corp reimburses me for the vehicle costs, do I then have to claim that on my personal taxes?

[DianeW777]

It depends. If the S Corporation requires you to use an accountable plan then the answer is no. However, if part of the reimbursement is for the personal use portion of your vehicle, then some income would be required to be reported and the S Corporation would enter that on your 1120S-K1.

• Review accountable and nonaccountable plans in IRS Publication 463. 

Deductions: The S Corporation will deduct that expense on their return and the net profit should come to you on the 1120S-K1.  You do not enter the expenses again on your tax return.

[Battyp]

No you do not need to claim on the personal as long as you have an accountable plan.