We have a small business (S-corp) and our sales person has been using her own car for company work. She paid all expenses for the car and we reimbursed her 58c per mile.
Recently her car was totaled, so we have bought a new car fully paid by the company. She will obviously use it for personal use as well. Can we continue to pay her 58c per mile for business use, and she continue to pay for all running expenses including insurance? Do we deduct the depreciation of the car from the 58c per mile reimbursements? Would this pass muster with IRS?
