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erichsend
New Member

Can I expense a car I own by the standard mileage rate & have my business buy another in the same year that I choose to expense through the actual expense of the car?

I (personally) own a car which has been used about 50% this year for solely business purposes.  I have a single member LLC which I elect to be taxed as S-Corp.  I plan to expense business only mileage using the standard mileage rate.

Since my business has been growing and becoming more mobile, I have decided to purchase a business only car in December of this year.  My question is, can I deduct both the standard mileage rate of the my personal car (from business related travel) AND deduct ~$11,500 of the actual cost of the car my business is buying? 

In 2018 and beyond I plan on deducting the actual expense rather than using the standard mileage rate on my business car and will ONLY use my personal car for personal use.  However this year it seems that I can deduct both since I am technically buying the business car at the end of the fiscal year.  From my research I have not found anything contradicting this, but I am not an expert to any degree.

6 Replies
TaxGuyBill
Level 9

Can I expense a car I own by the standard mileage rate & have my business buy another in the same year that I choose to expense through the actual expense of the car?

Sort of, yes.

Yes, you can use the Standard Mileage Rate on one vehicle and Actual Expenses with a different vehicle.

However, you need to clarify what you mean by "expense business only mileage using the standard mileage rate".  Do you have an Accountable Plan that you are submitting monthly reports to the corporation, and the then corporation reimburses you for those miles?  If not, what exactly are you doing?



erichsend
New Member

Can I expense a car I own by the standard mileage rate & have my business buy another in the same year that I choose to expense through the actual expense of the car?

I am a single member LLC elected as an s-corp.  So I just have an app on my phone that assists me in keeping track of miles.  So from my understanding, I just submit the miles I drove myself to the IRS using the standard mileage rate.  Am I wrong here?
TaxGuyBill
Level 9

Can I expense a car I own by the standard mileage rate & have my business buy another in the same year that I choose to expense through the actual expense of the car?

If the LLC/corporation does not own the vehicle, it can't deduct it.  It would either need to reimburse you (personally) for those miles, or you would need to deduct it as a personal Job Expense (which is limited).

I *HIGHLY* recommend going to a tax professional to learn how corporations work.  Doing things wrong can EASILY cost thousands of dollars.
erichsend
New Member

Can I expense a car I own by the standard mileage rate & have my business buy another in the same year that I choose to expense through the actual expense of the car?

Thanks Bill! I will definitely be taking your advice on that.  I plan on learning, asking questions and preparing my return and then paying a professional accountant to tear it to pieces and tell me what I did wrong before filing.  I was a comp sci and biz double major so stuff like this intrigues me and I would eventually love to be proficient in it.
TaxGuyBill
Level 9

Can I expense a car I own by the standard mileage rate & have my business buy another in the same year that I choose to expense through the actual expense of the car?

I recommend going to the tax professional NOW, before taxes are due, so you can learn what needs to be done NOW (such as the Accountable Reimbursement plan, payroll forms, etc.).
erichsend
New Member

Can I expense a car I own by the standard mileage rate & have my business buy another in the same year that I choose to expense through the actual expense of the car?

Sweet! Will do.  Thank again.
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